Digital music sales overtook physical for the first time in Australia last year.

This is according to figures released this morning by the Australian Recording Industry Association (ARIA) for January to December 2013.

Digital music now accounts for 54.7% of the Australian recorded music market, worth $192.3 million after selling 115.8 million units. In comparison, the physical format (CDs, vinyl, cassettes) dropped by 5.5% to a 45.3% share. It is worth $159.3 million.

However, digital’s expansion did not balance out the further decline of the CD.

So the value of Australia’s recorded music market is now $350 million ($351,618,966), a drop of 11.68% from last year. It was worth $398.1 million in 2012 (and $646 million in 2003). Through 2013, the market shifted 131.7 million units (131,721,015 to be exact). This was a decline of 6.02%. In 2012, the local music industry registered a 4% increase, its first growth since 2009.

Streaming revenue doubled to $20.9 million and now makes up 5.9% of market. Digital album sales rose 7.88% to $67.4 million while total digital download revenue stayed steady with a tiny (0.5%) rise. Revenue from subscription services was up 307.9% to $8.6 million.

CD albums dropped by 25.13% to revenues of $14.2 million while unit sales were down by 26.7% to 141.7 million units. CD singles continued to freefall. They were down by 53.4% in quantity (to 10,069) and down by 32.7% (just under $124,000) in their contribution to the industry’s revenue.

Those hailing the resurgence of vinyl will have a reason to cheer. Vinyl album sales were up by 76.6% to unit sales of 137,658 and a 53.3% rise in revenue to $2.84 million. Vinyl singles dropped 32.7% in value to nearly $125,000 and with a 53.4% drop in sales to about 10,000.

Also shrinking were sales of music videos and DVDs, hit by streaming. They just sold 1.4 million units and grossed $14.2 million (down by 18.6%).

The good news was that 2013 saw 14 Australian albums reach number one on the ARIA charts – a record, according to ARIA.

ARIA pointed out that with record companies expanding their revenues through touring, merchandise, synchronisation licensing and artist management, some labels showed individual growth.

ARIA CEO Dan Rosen is optimistic about the way the industry has embraced opportunities in the digital sphere.

He said, “The way that music is discovered and enjoyed by fans continues to evolve, and as the industry continues to transform itself, the sales trajectory will not always be a straight line. We have seen in other territories around the world that as streaming services gain momentum, strong market growth has followed. It is an exciting time, as Australian music fans are consuming more music than ever before with an ever-expanding range of options to access music – whether it is streaming music, digital downloads or visiting the local record store.”

ARIA chairman Denis Handlin AM reckoned, “2014 is set to be an extremely important year for our industry. The value of the creative industries to the Australian economy will be in focus as the Federal Government considers the recommendations of the Australian Law Reform Commission’s inquiry into copyright and the digital economy. As our industry continues to embrace the digital landscape, it is increasingly important that we have the business and rights protection environment in place to support our local artists and record labels, which make such a valuable contribution to our country’s cultural identity and creative economy.”

2014 will see releases from Australia’s 360, Andy Bull, Angus & Julia Stone, Architecture In Helsinki, Ball Park Music, Dami Im, Dan Sultan, Daniel Johns, Dustin Tebbutt, DZ Deathrays, Gang Of Youths, Harrison Craig, Hilltop Hoods, The Holidays, Justice Crew, Kimbra, King Gizzard & The Lizard Wizard, Matt Corby, Mark Vincent, The McClymonts, Megan Washington, Miami Horror, Nathaniel, The Preatures, Reece Mastin, Sally Seltmann, Samantha Jade, Sia, Stan Walker, Taylor Henderson, Vance Joy and Wagons.

Upcoming major overseas album releases are from Aloe Blacc, The Black Keys, Coldplay, Damon Albarn, David Guetta, Elbow, Foster The People, Florence + the Machine, Kanye West, Kendrick Lamar, Kylie Minogue, Lily Allen, Linkin Park, Magic!, Mariah Carey, Passenger, Pharrell, Sam Smith, Santana, Shakira, Rihanna and The Wombats.

Tell Us What You Think