Is iTunes saving the music business?

The music business has certainly faced its share of ups and downs over the years, as it struggles to deal with major challenges like free-file sharing.

However, the industry appears to be picking back up, with lucrative digital download services propelled by the likes of Apple’s wildly popular iTunes.

Indeed, according to the International Federation of the Phonographic Industry (IFPI), music revenues hit a cool $16.5 billion in 2012, the first year of industry growth since 1999.

Interestingly, IFPI’s figures showed global recorded music revenues up 0.3 percent for 2012, bolstered by downloads, subscriptions and other channels. In addition, revenues for digital music jumped nine percent to $5.6 billion in 2012, with the industry on the whole posting $16.5 billion in revenue.

As AppleInsider’s Kevin Bostic points out, $16.5 billion is definitely a long way off from the record $38 billion the industry posted at its peak in 1999, although industry analysts believe the modest growth posted in 2012 remains an encouraging sign.

Music subscription services have increased as well, up 44 percent in 2012, along with revenues, which is apparently up 59 percent as well. As expected, Apple is the most popular purveyor of digital music, followed closely by Spotify. 

“Pirate services are clunky and old-fashioned,” said Rob Wells, president of Universal Music Group’s global digital business.

“They’re being usurped by mass consumer migration to smartphones and access to millions of tracks from legitimate subscription services… The pirate option just cannot offer that complete consumer experience.”