Peter Kafka

Recent Posts by Peter Kafka

For the First Time Since Napster, Music Sales Are Growing

adele-grammy-cbs cropThe last time music was a growth business was 1999 — back when people bought millions of Britney Spears CDs, and GeoCities was the third-most popular Web property in the world. You know what’s happened since then.

But music’s slide may have finally stopped. Last year, recorded-music sales inched up 0.3 percent worldwide, to $16.5 billion, according to industry trade group IFPI. That’s the first time global sales have increased since the Napster era, and it echoes bumps we’ve seen earlier in the U.S. and other markets.

If the growth sustains, it means that the predictions we’ve been hearing for a decade and a half have finally come true: Digital sales are increasing fast enough to outpace the decline in physical. Last year, digital grew 9 percent and accounted for 34 percent of revenue.

Some of that growth comes from the rise of subscription services like Spotify and Deezer, which now represent more than 10 percent of worldwide digital revenue. But digital sales are still primarily about iTunes and download sales, which account for 70 percent of the total. Sales on iTunes have been flattening for some time in the U.S., but as Apple expands internationally, its numbers keep growing.

And just like last year, the music industry is also a synonym for the Adele industry. Just like last year, her “21” album was the world’s best-seller, moving 8.3 million units (this would have been a pretty good number in 1999, too). Taylor Swift’s “Red” came in second with 5.2 million units. Brit boy band of the moment One Direction had the next two spots, with total sales close to nine million.

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I think the NSA has a job to do and we need the NSA. But as (physicist) Robert Oppenheimer said, “When you see something that is technically sweet, you go ahead and do it and argue about what to do about it only after you’ve had your technical success. That is the way it was with the atomic bomb.”

— Phil Zimmerman, PGP inventor and Silent Circle co-founder, in an interview with Om Malik