The digital revolution at the turn of the century has long been viewed as a stake to the heart of the recording industry. However, just when it appeared that the industry would flatline, good news has arisen and the recording industry has found a pulse. According to figures posted by the International Federation of the Phonographic Industry, for the first time since 1999 the recording industry experienced an increase in revenue last year.
“It’s clear that 2012 saw the global recording industry moving onto the road to recovery,” said Frances Moore, chief executive of the federation, which is based in London. “There’s a palpable buzz in the air that I haven’t felt for a long time.”
For years, the music industry’s decline looked terminal, with the record companies seemingly unable to come up with legitimate digital business models that could compete with the lure of piracy. Last year, however, digital sales and other new sources of revenue finally grew significantly enough to offset the continuing decline in CD sales.
“At the beginning of the digital revolution it was common to say that digital was killing music,” said Edgar Berger, chief executive of the international arm of Sony Music Entertainment. “The reality is that digital is saving music.”
It's a nice start for the music industry but they have along way to go as publishing companies continute struggling. 2012's recording industry revenue of $16.5 billion was a 0.3% increase over 2011 but was still less than half of its peak at $38 billion in 1999. For much of the 21st century, the industry was plagued by the "disease of free" as online file-sharing services such as Napster siphoned revenue away from recording companies. Previosly forecasts predicted that record sales would continue declining until they reached $5.5 billion. It's not a coincidence that an increase in the recording industries' revenue occured while illegal music sharing decreased by 26%.