Spain’s recorded music industry registered marginal growth for the first six months of 2018, with the digital business now generating nearly three quarters of its revenues.
The market generated €107.6m in H1, which was up less than 1% year-on-year (+0.36%).
Despite a 53% rise in revenues earned from subscription streaming, the marginal growth is down to a dramatic decrease in income earned from free streaming tiers.
That’s due to new licensing agreements with record labels and streaming services, which “severely” adjust income margins for freemium tiers, according to local sales monitor ProMusicae.
In H1 2018, money earned from ad-supported streaming tiers reached €8.4m — down 61.7% from €21.8m in H1 2017.
Subscription tiers generated €52.8m during the same period — a rise of 52% on 2016’s €34.6m, counting for 67% of digital revenue.
Should the rate of growth stay steady for the rest of 2018, it will be the lowest increase since the Spanish music market returned to growth in 2014.
Annual recorded music revenues in Spain dropped by a shocking 80.2% between 2001 and 2013, down from €626.1m to €123.7m.
Predominantly thanks to the rapid rise of streaming, in 2014, the country’s recorded music market was up 11%. In 2015, that growth reduced to 7%.
In 2016, growth slowed again with sales up by 1.67%,. In 2017, the market recorded its fourth year of consecutive growth with sales up a healthy 8.9% to €231.7m.
From January to the end of June this year, download revenue dropped by 23%, from €5.3m to €4.1m.
Overall, digital counts for a 73.5% share of the Spanish market, generating €79.1m while rising 6% on 2016.
Revenues earned from physical sales decreased to just under 13% to €28.5m from €32.6m.
CD sales were down 19% to €22m, while vinyl rose 13% to €5.1m.
Money earned from music on video platforms like YouTube grew 6.9% to €11.5m, coutning for 15.9% of total streaming revenue.
In the same period, income from music video overall rose 54.2% thanks in part to the success of DVD release, Operación Triunfo 2017, El Concierto (pictured).
“One of the priorities of our sector has been to promote the benefits of paid [streaming] subscriptions and it is comforting to see such positive results.”
Antonio Guisasola, Promusicae
Discussing the results, Antonio Guisasola, President of Promusicae said: ”One of the priorities of our sector has been to promote the benefits of paid [streaming] subscriptions and it is comforting to see such positive results.
“Consumers already assume [it] a normal thing to pay a small monthly fee to have access to all available music and enjoy it to the fullest.
“We believe it is a consumption model that is on track and that will be the gateway to revenue recovery for the industry.”
Nodding to the ‘value gap’, Guisasola continued: “Do not be fooled by the positive [growth] figure [in video streaming revenue].
“Music is a great content and claim in these platforms and is the main source of music consumption in streaming, but we are far from receiving adequate remuneration.”
Music Business Worldwide