Germany’s recorded music trade group says it still sees potential upside ahead, despite a slowdown in the growth rate of recorded music sales.

The German Music Industry Association (BVMI) says recorded music sales in the first half of 2025 hit EUR €1.157 billion (USD $1.36 billion at the average exchange rate for Q2 2025),on a retail basis. That’s up 1.4% from the same period a year earlier.

Given that Germany’s year-on-year inflation rate has been running at around 2% in recent months, this suggests that, on an inflation-adjusted basis, retail music sales shrank slightly in H1.

The latest numbers represent a significant slowdown from H1 2024, when recorded sales rose by 7.6% YoY.

The H1 2025 numbers were somewhat stronger for digital music sales specifically (streaming and a la carte downloads), which rose 3.9% YoY.

However, that growth was partly offset by a 13.2% YoY decline in physical sales (vinyl and CDs), with CD sales dropping 20.1% YoY.

The numbers reflect a general malaise in Germany’s economy, which has stagnated in the past several years mainly due to high energy prices. However, after near-zero growth in 2023 and 2024, there have been signs of a pickup recently. The country’s real (inflation-adjusted) GDP grew 0.3% in Q2 2025.

Dr. Florian Drücke, Chairman & CEO of BVMI, remains optimistic about the recorded music business going forward.

“As an industry, we are currently in an exciting phase in which there is still potential for growth, even in developed markets such as Germany,” he said in a statement on Thursday (July 24).

“In this environment characterized by huge technological leaps, our industry is particularly reliant on European legislators keeping an eye on the legal framework for future digital business areas. This currently includes the consistent continuation of the path taken with the AI Regulation in order to enable the digital license business.”

“We are currently in an exciting phase in which there is still potential for growth, even in developed markets such as Germany.”

Dr. Florian Drücke, BVMI

Large parts of the European Union’s AI Act will come into force in early August, and earlier this month the European Commission unveiled a voluntary Code of Practice for AI companies, designed to help them avoid regulatory burdens from the Act.

The Code’s principles include guidelines on how AI companies collect copyrighted content online, requiring them not to circumvent restrictions placed by rightsholders on web-scraping of data. The Code also requires them to avoid collecting material from copyright-infringing sources such as digital piracy websites.

Many of the most prominent AI companies, including Anthropic, Microsoft and OpenAI, have committed to abiding by the Code, although Facebook and Instagram owner Meta Platforms has said it won’t sign on.

Some aspects of the EU’s AI regulations have proven controversial with rightsholders, for instance the “opt-out” mechanism that requires copyright owners to explicitly state that they don’t want their content to be used to train AI.

That regulation last year prompted both Sony Music Group and Warner Music Group to send out letters to AI developers informing them that they are opting out of having their materials used to train AI.

German performing rights collection society GEMA has been at the forefront of music industry bodies calling for a licensing marketplace that would enable artists and music companies to be paid for the use of their music in training AI.

“We are prepared to negotiate fair terms of use and remuneration models with the AI companies,” GEMA’s Christina von Gemmingen-Hornberg said last year.Music Business Worldwide