German Music Market 2017
Beautiful Listening

In Germany recording media are still of major importance for the perception of music. Is this anticyclical, old-fashioned, or perhaps visionary?

For the fourth year in a row, the German music industry is rejoicing in its growth, on the order of three per cent. This doesn’t seem much, but, after long years of decline, is quite positive. The growth engine is audio streaming: just under a quarter of sales now takes place in this still young market segment, with the trend rapidly increasing. On the other hand, the old medium of the CD has not yet had its day. In 2016 it accounted for just under 60 per cent of the turnover in Germany, albeit with a decreasing rate.

Positive Signals

Overall, the German market for recorded music in 2016 amounted to nearly 1.6 billion euros. A lot of money, but far from the “Golden Age”: twenty years ago, in 1997, CD album sales alone generated 2.3 billion euros. Then came MP3, the internet and file sharing networks. According to the narrative of the music industry, the nadir has been passed and the business become the shaper instead of the plaything of the digital world. And so the entire disruptive process of digitalization is no longer presented as a scenario of doom but rather as one with different bogeymen. After years of broadside accusations of piracy against the internet as such and file sharing in particular, stream ripping has been branded by the music industry as the new phenomenon that cheats creative artists and their middle-men of their revenue options on the market.

Illegal software, with which you can make streams on Youtube or elsewhere into audible and locally stored data, hardly match up to the image of a livelihood loss-maker, for the principle of the download has in any case been replaced by streaming. Another finding of current market analysis is that whoever subscribes for access to diverse streaming services, feels no need to purchase the same music in the form of a download. The share of downloads declined more than 20 per cent in 2016, now amounting to only a little more than twelve per cent of the German market.

In Scandinavia, for example, digital music everywhere means almost exclusively streaming. There are a few possible reasons for this: for instance, in Sweden, the numbers for internet accesses, high-speed internet and smartphones per capita are significantly higher than in Germany. For the mobile use of music in particular, less expensive data transfer and high bandwidth are relevant factors that influence the forms of music consumption. If you have to pay less to have large amounts of data at your disposal, you are happy to make use of film, series and music streams. The lacking broadband expansion in Germany helps the trade in physical products.

Music for 30+

Another factor lies in the music itself: if you look at the official annual album charts for 2016, you will find only a few records in the German Top 20 evidently aimed at people under thirty. The rest are suitable for the entire family, especially parents and grandparents. And these older generations of listeners are predominantly loyal recording media buyers. From Udo Lindenberg, who with his proud seventy years heads the list of the best-selling albums, on down, it is mature gentlemen (Metallica, The Rolling Stones, Böhse Onkelz) and age-independent popular ladies (Andrea Berg, Adele, Helene Fischer) who account for the German turnover. In the long run, their sales come to more than, for example, those of the German rappers popular among young people, who temporarily dominate the Top 10, but then mostly disappear from the ranking in a short time.

The conspicuous chart behaviour of German rappers at the time their albums are released is to do with the fact that hit parades now no longer rate unit sales but rather turnover – since 2014, also streaming-on-demand. In German-language hip-hop the practice of often offering limited fan boxes has proven its worth. They are usually snatched up by the kids in the week of release out of fear that they will otherwise miss their chance. This creates a big turnover at a specific time. Then all’s well with the high chart entry, even if unit sales represent only a fraction of the competition.

The old vinyl record

Vinyl record sales, on the other hand, are again part of the self-image of the music industry. Sacrificed for a long time ago to the industry’s will to progress (and the higher profit margins of CD sales), in 2016 vinyl enjoyed a substantial four per cent of the market share – substantial especially because it was an increase of 40 per cent in the segment over the previous year and vinyl now turns over more than music DVDs and Blu-rays combined. The music market thus seems to find itself in reverse gear: during the last pre-Christmas season the sales of vinyl in, for example, England, reached higher turnovers than did downloads.

Along with well-known and historical stock, freshly posthumous offers sell particularly well. In 2016 David Bowie and Prince in vinyl format were top sellers on the market. And only somewhat over 50 per cent of the LPs sold, according to a BBC study, are ever played. The records often end up in their original packing on the collector’s shelf; after all, the download code is usually part of the price and you can easily transfer the music to the same music system on which you listen to other formats. In fact, according to the study, seven per cent of vinyl buyers possess no record player at all.

Streaming vs. background

Something else is also striking: sound quality in streaming remains second-rate, as is the provision of customers with additional details, once supplied by booklets. You hear data-reduced, sound-compressed and standardized music not least because the interests of individual target groups are very different. Hip hop fans are probably less interested in the technical personnel and participating studio musicians, in recording data, composers, arrangers, studios and the like, but quite possibly in related samples, the interpolation of other songs and similar background. None of this information is provided for listeners/subscribers to streaming services. They have to look for it themselves in other places. If they don’t like this, they can still opt for a CD or vinyl.

Finally, the fans of genres often less noted than pop should not ignored. For it was a true Old Master whose releases in 2016 sold the most physical recording media in Germany. There were only about 6,259 people who purchased the box set Mozart 225: The New Complete Edition, but since it consists of 200 CDs, Wolfgang Amadeus, with 1.25 million CDs sold, was able to prove once again what a popular superstar he still is.