Physical sales were always a significant contributor to the German music industry. Japan is the only country that is ahead of Germany when it comes to physical formats. In 2016, physical media accounted for 62.1-percent of music sales in Germany whereas in 2017 it accounted for 53.4 percent of the market. In 2018, 57.1 million audio records were sold in Germany compared to 212.6 million audio records sold in 2001. The decline of physical formats in Germany can be understood when streaming revenue overtook CD sales in Germany for the first time in H1 2018, ending the CD’s 30 years of market dominance. Germany has retained its position as one of the world’s top recorded-music markets (no. 4) primarily because of strong physical music sales. Although, now the German music industry is backing the streaming market because of fast-declining physical sales.
The German Music Industry Association (BVMI) announced that the industry grew significantly in the first half of 2019.
German Music Industry generated a total of €783.21 million ($882.4 million) from audio streams and the sale of CDs, downloads and vinyl.
That marks a 7.9% increase from the same period a year ago (H1 2018: €725.9 million) and marks the highest growth rate since 1993.
Audio streaming grew by 27.7% in the first half and further expanded its position as the number one segment by revenue. In addition, the CD sales were down by 11.7 % compared to the same period last year, while vinyl continued to grow (+7.4 % compared to the same period last year). Downloads declined significantly (-16.3 %), but less than in the first half of 2018.
“Streaming is now also having a leverage effect in Germany,” said BVMI chairman & CEO Dr. Florian Drücke. “With a digital share of two thirds, the industry shows how far it already is on the way to digital turnaround. The reasons for the dynamic growth rates in (legal) audio streaming are above all, attractive offers, but also the prevalence of smartphones and flat rates.”
The overall digital business grew by 21.1% in the first six months of this year to reach a 66% share of total revenues which was 56.7% in 2018. Accordingly, the physical business (-11 %) accounted for 34 % of total revenues. At 56.4%, audio streaming has the largest share of industry revenues, followed by CDs (28.2%), downloads (6.6%) and vinyl (4.4%).
Germany has typically been a buoyant market for physical sales (similar to Japan) and it was reported by the BVMI in H1/2018 that streaming has become the preferred choice of music consumption in the country.