Australia Reports 11% Shipment Rise

Bucking a global trend, the Australian recording industry registered an 11% volume rise in shipment volume through 2001, according to the Australian Record Industry Assn. (ARIA).

The industry registered shipments of 63.8 million audio and music units with a dollar value of $647.6 million Australian ($336.7 million) from January to December. By comparison, units sold in 2000 were 56.6 million with a dollar value of $593.7 million Australian ($308.7 million).

ARIA executive director Stephen Peach suggests that 2001 showed a spark of activity following a slowdown in 2000 from the July 1 introduction of the 10% across-the-board Goods and Services Tax and the Sydney Olympic Games. "This is a recovery year where we got back to the expected trajectory," Peach says. "Australia headed into tough economic conditions a year before everyone else, and at present the Australian economy is doing better than most."

Retailers suggest that a substantial part of the 11% rise can be attributed to suppliers cashing in on the low exchange rate of the Australian dollar by exporting domestic product to overseas affiliates. Nevertheless, there are positive signs. CD albums shifted 49.6 million units compared with 43.9 million in 2000, and CD singles rose to 12.3 million from 11 million. Music DVDs and videos leapt by 65.4% to 954,840 units, compared with 577,026. Of that figure, 762,000 were DVDs, showing strong growth for the format.

The 11% growth in volume was offset by an overall 3.5% average wholesale price reduction. Australian Music Retailers Assn. (AMRA) chairman Gavin Ward says, "Prices have plummeted—severe discounting has brought them to $19.99 Australian [$10.40]." A full-price CD in Australia retails at $31 Australian ($16). But, Ward says, "the market's been dynamic. There is good music around, and people are buying it. But from a retail point of view, gross profits are down."

ARIA's figures do not split shipments between Australian and international acts. But some label executives who asked not to be named suggest the domestic figure is between 17% and 20%—down from 23% the year before.

Reduced profits from lower CD prices have led to decreased promotion for local acts. Most label executives are also critical of radio's low support of domestic music: Australian music only accounted for 20% of domestic airplay in 2000, according to the Phonographic Performance Co. of Australia, which monitors radio airplay for record companies. By comparison, U.S. acts represented 50%-55% and British acts around 25%.

Local music's share of airplay has risen since May 2001, when the rise of a third national radio network, DMG, broke the duopoly enjoyed by national giants Austereo and Australian Radio Network—with the resulting effect of loosening up playlists in all networks. Rob Logan, PD of Austereo's modern rock station 2DAY-FM in Sydney, says, "We consistently play up to 30% of local acts, and record companies have learned to come up with more international quality records by Australian acts that we can play."

Nova FM Sydney PD Dean Buchanan adds, "There is a tremendous amount of good new music coming from overseas, and Australian acts are proving they can compete."

Ward says that a market share of 17% for domestic music is still encouraging: "It's a good achievement, given the strong quality of overseas records."