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Recorded Music's 12-Year Decline Finally Ends

(c) Sky News 2013

The recorded music business has seen its first jump in revenues since 1999, raising hopes the sector is on the road to recovery.

Total (NYSE: TOT - news) revenues for the industry rose 0.3% to $16.5bn (£10.9bn) in 2012, with digital making up more than 35% of the figure.

The International Federation of the Phonographic Industry's annual Digital Music Report concluded that the global music industry is now returning to health.

A decade after online file swapping plunged it into turmoil, it appears to have been boosted by licensed services and rapid expansion into new markets internationally.

Digital (Milan: DIB.MI - news) revenue rose for a second consecutive year, up 9% with most major digital revenue streams including downloads, subscription and advertising-supported all growing.

The report suggested that the digital music business was aiding globalisation, partly thanks to smartphones and new licensed services.

It found major international download and subscription services were present in 23 markets in January 2011 but that had now jumped to more than 100.

Frances Moore, chief executive of IFPI said: "It is hard to remember a year for the recording industry that has begun with such a palpable buzz in the air.

"These are hard-won successes for an industry that has innovated, battled and transformed itself over a decade. They show how the music industry has adapted to the internet world, learned how to meet the needs of consumers and monetised the digital marketplace."

Canadian artist Carly Rae Jepsen topped the 2012 global singles chart with Call Me Maybe.

But British singer-songwriter Adele, who won an Oscar for her track to the latest Bond movie Skyfall on Sunday, also achieved phenomenal success.

Her album 21 is the first to top the global albums chart for two consecutive years since IFPI began reporting global best sellers in 2001.

The industry's return to growth has been a long time coming.

Online song-sharing popularised by services such as Napster at the turn of the millennium seriously destabilised the sector, which reacted with a barrage of lawsuits.

But the war on piracy failed to stem the tide of free music, and by the time executives finally began making legal music available through download services such as Apple (NasdaqGS: AAPL - news) 's iTunes, the industry was in free fall.

Since its 1999 peak, the global music industry's revenues had crashed more than 40%.

The IFPI said the physical music market continued to contract in 2012.

Meanwhile, the US recording and film industries are activating America's first copyright alert system this week to thwart piracy by online users.

Official warnings about specific internet addresses could be made after complaints to internet service providers (ISPs).

It is understood illegal downloaders will be given up to six warnings before ISPs can slow their download speeds, prohibit internet traffic redirections or interrupt connections.

The impositions are expected to be maintained until illegal downloaders acknowledge complaint letters or accept receipt of literature explaining copyright law.