For the second year in a row, the music industry showed promising signs of recovery, says the International Federation of the Phonographic Industry (IFPI) in its annual Global Music Report. But it may be a bit early to start the victory parade.

Although the 2016 Global Music Market numbers reveal worldwide revenue growth of 5.9% to $15.7B (all numbers in U.S. dollars) - good news in the wake of the 2015 increase of 3.6%, the first improvement since 2000 - IFPI says the good news should be tempered by the fact that the industry suffered a 40% loss of value the preceding 15 years.

"We are no longer running up a down escalator, but that doesn't mean we can relax," noted Stu Bergen, CEO of the Warner Music Group's International and Global Commercial Services, in a conference call, labeling the streaming revenue increase of 60.4% as "deceptive, not least of all because that growth is being undermined by some services. They're exploiting safe harbour laws, distorting competition and undervaluing music. Not only that, we're still in the early stages of our transformation: streaming is less than 30% of the global revenue."

The resulting value gap due to the malfeasance of those services continues to play havoc with record company bottom lines.  

Despite these concerns, IFPI's 2016 assessment did include some optimism: the 5.9% rate of growth is the fastest since the global organization began tracking this info in 1997.  Another first: the digital share of global revenues reached 50%, marking the total share of music revenues.

Overall, digital revenue growth increased by 17% to US$7.8B. Streaming accounted for 59% of digital revenues.

While the revenue from CDs took an expected hit, registering a 7.6% decline, digital downloads also suffered, decreasing by 20.5% over 2015. Additionally noteworthy is the fact that "the composition of music markets around the world vary greatly. The biggest market - the US - is 70% digital, while the next biggest, Japan, is over 70% physical," Bergen notes.

Performance rights - revenue generated by the use of recorded music by broadcasters and public venues - grew by 7% to US$2.2B in 2016. Although it accounts for 14% of the market, IFPI suggests it is significantly undervalued. 

The US, UK and France were the three largest performance rights markets in 2016, with Germany and Japan being singled out as the greatest under-performers.

IFPI believes that as music consumption veers away from ownership to consumer access, the global performance rights market has "significant growth potential."

Synch revenue maintained its 2% share of the global market, although the revenue from the use of music in film, games and TV programming grew by 2.8% in 2016 - significantly less than the 7% growth spurt enjoyed in 2015.

Another promising digital stat: paid streaming subscriptions broke the 100M threshold - numbering 112M, to be exact - confirming streaming as the music industry's key growth driver.

In North America, the market grew by 7.9% - a significant improvement on the 1.5% registered in 2015. The digital revenue growth of 16.5% offset the declining physical sales of -17.1%, with streaming revenue increasing by 84.1%. The US streaming income increased by 80.5%, growing by 7.6% overall, a vast improvement over 2015's growth of 1%.

Developing music markets also enjoyed growth due to streaming, with significant 2016 revenue increases in China (20.3%,) India (26.2%) and Mexico (23.6%).

As for remedying the value gap, IFPI Chief Executive Frances Moore says Europe is coming up with legislative solutions to the problem she hopes the rest of the world will eventually follow.

"In Europe, where we have legislation on the table that recognizes the existence of a value gap and is putting forward proposals in order to deal with it, and we would hope to have the same approach around the world," Moore said during a teleconference emanating from London on Tuesday. "It's a global problem and it requires a global  action and the industry will continue to fight worldwide for a level playing field."

In a previous announcement, IFPI named Drake the Global Best Selling Artist of 2016.