Across the global market, a trend is taking hold. Declining revenues in physical sales of albums are being replaced by increasing sales in the digital world, particularly music streaming platforms such as Spotify and Deezer.
In Germany however, physical sales dropped off much more slowly and are holding their own, accounting for 71% of total revenues in the industry according to BDVM (Bundesverband Musikindustrie). In an interview with Rolling Stone, Frank Briegmann, president of Universal Music Germany stated, “Over the past few years, we have repeatedly tried to generate impetus for the physical market without merely lowering prices.” Much of the strength of the physical market in Germany can be explained by packaging. Artists often release extra features and special editions, but German artists and labels are releasing something called “Pur Edition” several months after the initial release. These editions have stripped down packaging and streamlined inserts to provide a lower cost model for consumers.
Another example of why Germany’s physical market was so strong might be evidenced by the GEMA (Gesellschaft fur musikalische Auffuhrungs- und mechanische Vervielfaltigungsrechte)’s dispute with Youtube in 2009. The German courts found that Youtube can be held liable for any infringing videos that are posted on it’s site. For this reason, over 60% of the top 1000 most popular Youtube videos are blocked. This made many citizens unable to easily view music videos online. But this blockade has ended with an agreement between Vevo and GEMA. For the first time ever, Vevo will launch it’s videos without Youtube. This may help explain the decline in physical sales as people find it easier to watch videos and get music online.
Currently, 1 in every 5 euros that are being earned in Germany from the music industry now, are from digital sources. 8.4 million people purchased and downloaded music in 2012, 55% of which bought full albums. This is promising for artists looking at an increasingly singles dominated market. Music streaming platforms such as Deezer, Musik and Spotify hold a 12.1% share of digital revenues and 5 % of total revenues, the biggest amount of growth seen this year.
Germany’s music industry experienced a slight decline this year however, because these increased digital sales are not fully keeping up with the losses of physical revenue.
Unlike France, Germany’s number one single this week is not a native artist.