I am a sucker for pretty graphs and charts. I care about the underlying numbers too, but it’s always impressive to me when someone can present that data in a way that’s both easy to grasp and visually stunning.
So I hereby present a pretty graph, which I found on the website of the Bundesverband Musikindustrie (German Music Industry Association), specifically, their look back in the past 34 years (?? couldn’t they have gotten a nice round number instead? 34 years is just not catchy!) of music distribution in Germany. If you read German and want a thorough overview of the developments in the German-speaking world it’s worth a look.
And now the graph!
Isn’t it pretty? Let’s all sit for a second and admire the vibrant colors. Some poor graphic designer probably spent hours selecting and fine tuning the right shades for visibility and contrast and who knows what else. This looks much better in full print 300DPI resolution, by the way, so by all means click on it and look at it in its full blown glory.
Here we can see CDs started entering the market in the mid ’80s, a process that Blixa still remembers where the record labels using the “new technology/format” as a reason to reduce royalty payments for sales in that format, and then reaching its dominance through the bulk of the ’90s. The napster/download revolution didn’t really hit Germany until a few years after it started in the US, and we can see the steep slope of the decline in sales in the new millennium. This is particularly impressive because Internet connections in Germany were so terrible back then; I know from experience that in 2002 the majority of Germans were still on dial-up, Telekom was extremely heavily invested in ISDN lines instead of proper broadband, so downloading media was a slow and unpleasant process.
The first supporter project, what’s now called phase 1, was started against that background: the record industry in what looked and felt like unstoppable free fall, but digital not really in the picture yet. By the time that phase 3 ended and Alles Wieder Offen was released, CD sales had hit what seemed to be the new normal, while digital revenues were hardly making a dent. (Side note: anyone else find the little sliver of ring tone revenue around then hilarious?) Some of the thoughts and actions of the bands re: digital platforms is perhaps more understandable given that they were formed with the information from back then. By the way, I predicted back in the mid 2000s (and there’s video evidence somewhere) that the future of music will be in subscription based streaming, once mobile Internet became sufficiently prevalent and inexpensive. I did not, however, want to get into that particular business, because of the awful complexities of existing copyright laws and geographical restrictions and other problems that still plague the music industry. Shall we talk about back catalogs, anyone?
As of the end of 2018, which is where the graph stops, digital revenue has clearly overtaken physical, even though Germany is one of the few markets worldwide where physical sales still carry significant weight. This graph is not directly comparable to the global music industry revenue chart from IFPI (linked to in previous post), the IFPI numbers include all income streams derived from recorded music, not just physical and digital sales. Hence performance rights (royalties paid on songs performed live) and synchronization rights are not included in the German revenue graph.
By IFPI methods, globally physical sales are only 24.6% of all recorded music revenue and falling 10.1% year to year, whereas in Germany it is still about 35%. If we don’t include those royalty revenues then physical media sales in Germany account for 43.3% of the market share in 2018, but I believe the global trends also apply, though with a couple of years of lag.
Vinyl, despite the resurgence that it has seen in the past decade, is still far below CD numbers, though of course that varies significantly depending on one’s fan base and niche.
Fun, isn’t it, what one can get out of a pretty graph?