German Music Business Grows For The First Time in 15 Years

8:53 AM PST 03/06/2014 by Scott Roxborough

Online Streaming, steady CD sales and a vinyl boom add up to $2 billion in revenue for the territory in 2013.

Germany's music industry posted a slim sales boost in 2013, with revenues up 1.2 percent to $2 billion (€1.452 billion) thanks to steady CD sales and skyrocketing digital revenues, particularly from online streaming.

It is first time in 15 years – essentially since the launch of online music sharing site Napster in 1999 – that annual music sales in the territory have gone up instead of down.

A combination of factors helped the German industry manage the turnaround. The sale of physical CDs, which remains the core of the market – accounting for nearly 70 percent of overall revenue – remained steady, slipping only a marginal 1.3 percent to $1.4 billion (€1 billion). Digital sales, in contrast, jumped 11.7 percent over the same period to $453 million (€328 million) and good old vinyl continues its comeback, with record sales jumping 47.2 percent to $40 million (€29 million) in the territory.

"The growth in Germany, in contrast to so many other countries, is, along with the growth in digital, in particular the strength of the physical sales market," said Florian Drucke, managing director of German music industry association BVMI.

In total, physical sales accounted for 77.4 percent of the German music market in 2013, compared to 22.6 percent for digital.

Germany's digital music boom is largely due to online streaming on services such as Spotify, Napster or local player Simfy. Streaming revenues were up a staggering 91.2 percent to $94 million (€68 million) while digital album downloads on services such as iTunes grew a more modest 4.8 percent to $209 million (€151 million).  Singles downloads fell 4.4 percent to $144 million (€104 million). Streaming revenues nearly doubled their share of the overall market, accounting for 4.7 percent of total revenues in German last year.

The local industry is also enjoying a boom in home-grown talent. Seven German artists made the top ten album sales charts for the year, many of them, including Helene Fischer, Andrea Berg and veteran performer Heino, coming from the German Schlager tradition of sentimental pop ballads. 45 of the 100 top-selling albums in Germany last year were from German-language artists.

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