Music biz on the rise Down Under

4.8% gain in revenue powered by digital, CD sales

BRISBANE, Australia -- The record business Down Under is on the ascent.

Full-year 2009 trade figures issued Wednesday by labels body ARIA show a 4.8% gain in wholesale revenue to $446.1 million Australian ($395 million), powered by a booming digital music sector and solid CD album sales.

Not since the Australian market peaked in 2003 has ARIA reported a full-year period of growth. "These numbers are encouraging and we feel optimistic. But we have to be careful not to be overly optimistic," said Ed St John, ARIA chairman and president/CEO of Warner Music Australasia. "These figures show the green shoots of recovery, but obviously the market is still under pressure all over the world. I don't know that the industry would say it's out of the woods just yet."

That Australia's myriad digital channels provided the big highlights should come as no surprise. During a year which welcomed new arrivals in Nokia's Comes With Music and MySpace Music, Australia's digital music business in 2009 grew by 46% to $79.2 million ($70 million).

All digital formats -- tracks, albums, mobile master ringtones and "other" -- reported gains. But it was the digital album format that proved a real beacon. More than 2.2 million digital albums were sold in 2009, up 72%, for a value of $21.8 million ($19.3 million), up 66%. During the period, digital albums accounted for 7.5% of all album sales by volume, up 4.35% from the same 12-month period of 2008. More than 35 million digital tracks were sold during the year, up 43%, for a value of more than $38 million Australian ($33 million), up 42%.

The business for mobile master ringtones continues to ebb away. Consumers purchased 3.6 million ringtones, 23% less than in 2008, for a value of $6.3 million ($5.5 million), also down 23%.

Australian music buyers aren't all about downloads and streams. The CD album accounts for the lion's share of the market, and the product still finds favor with the public. Last year, the CD album format shrank by less than 1% in value to $320 million Australian ($283 million), no doubt helped by what retailers have described as a strong Christmas sales period and in particular the smash successes of Susan Boyle's debut album "I Dreamed a Dream" (Syco/Sony Music), which is now certified eight-times platinum (560,000 units-plus).

The revival of the vinyl album format continues. Vinyl hunters spent more than a million dollars ($880,000) on the collectibles in 2009, up 167% in value from 2008.

However, the news wasn't so good for the CD single format, which saw 63% of its value wiped during the 12-month period, and now generates just $1.3 million Australian ($1.15 million).

Australia does not yet have a graduated response or "three-strikes" policy to help control peer-to-peer piracy. That may well change in the coming months. The Australian government has indicated it is closely watching the decision in a copyright battle between the iiNet Internet service provider and a coalition of film and TV companies, before considering any legislative moves. A "three-strikes" code hasn't been ruled out.

St John, like his fellow music industry professionals, will be eagerly anticipating the Federal Court verdict, which is expected to be handed out Thursday.