Growth was due to implementatin of licensed digital music services and rapid expansion into new global markets.
The global music industry reported a 0.3% rise in revenues to $16.5bn in 2012 for the first time since 1999, according to the International Federation of the Phonographic Industry's (IFPI) Digital Music Report.
The report revealed that growth was due to the introduction of licensed digital music services and rapid expansion into new global markets.
IFPI chief executive, Frances Moore, said that it is hard to remember a year for the recording industry that has begun with such a palpable buzz in the air.
"These are hard-won successes for an industry that has innovated, battled and transformed itself over a decade," Moore said.
"They show how the music industry has adapted to the internet world, learned how to meet the needs of consumers and monetised the digital marketplace."
During the year, digital revenues rose 9% to $5.6bn, while download sales also reported a 12% rise, representing about 70% of overall digital music revenues.
However, IFPI estimates that about a third of all internet users still regularly access unlicensed websites.
According to Moore global markets remain rigged by illegal free music.
"This is a problem where governments have a critical role to play, in particular by requiring more cooperation from advertisers, search engines, ISPs and other intermediaries," Moore said.
"These companies' activities have a decisive influence in shaping a legitimate digital music business."
Another report from The NPD Group revealed that global illegal music file sharing has dropped significantly in 2012.
About 40% of users who had illegally downloaded music through P2P services in 2011 had stopped or reduced music downloads from P2P networks, the NDP report reveals.