LONDON • Massive growth in the online streaming of artists, such as Drake and the late David Bowie, saw music industry revenues grow last year at their fastest rate since record-keeping began, a global industry body said on Tuesday, even as physical sales fell again.
The global market for recorded music expanded by 5.9 per cent last year, the quickest pace since industry body International Federation of the Phonographic Industry (IFPI) began tracking the market in 1997.
It rose for a second straight year after losing nearly 40 per cent of its revenues in the preceding 15 years, with the recovery driven by a 60 per cent jump in income from streaming.
In all, digital income accounted for half of the music industry's revenue for the first time.
The business initially struggled with the demise of the market for physical sales, as the advent of the Internet facilitated illegal downloads that crimped profits.
However, the rise of subscription-based services such as Spotify and Tidal has helped it recover, even as the market for physical formats has continued to shrink and download revenues have fallen too.
"As an industry, we've had years of investment in innovation to make (growth) happen and we're starting to see the shift... from adapting to the digital age to actually driving the digital age," IFPI chief executive Frances Moore told reporters in London.
Total revenues for the industry were US$15.7 billion (S$21.9 billion) last year, aided by 112 million users of paid music streaming subscriptions by the end of the year.
The growth in streaming more than offset a 20.5 per cent decline in downloads and a 7.6 per cent fall in revenue from physical sales.
The top-selling artist was Canadian rapper Drake, while the death of Bowie last year spurred purchases to make him the second most popular artist of the year.
Coldplay bagged the third spot.
Prince, who also died last year, was ninth on the list.
Despite the improvement, industry executives cautioned against complacency.
"We're only two years into our recovery. We must remain alert, resourceful and ambitious," said Mr Stu Bergen, chief executive of international and global commercial services at Warner Music Group.
"We're no longer running up a down escalator, but that doesn't mean we can relax."