Music download sales more than triple

The market for music downloads tripled in value during the first half of this year and now accounts for 6 percent of total record industry sales.

The market for music downloads from the Internet tripled in value during the first half of this year and now account for 6 percent of total record industry sales, a sign of how fast online delivery of music is catching on.

The value of digital music downloads to computers and mobile phones rose to US$790 million in the first half of this year, up from US$220 million during the same time last year, according to the International Federation of the Phonographic Industry (IFPI), in a statement Monday.

In fact, the digital music market has already overtaken the global singles market in terms of value, the London-based industry group said.

The group said booming demand for music downloads nearly offset a decline in sales of recorded music on formats such as CDs and DVDs, which fell 6.3 percent in retail value to US$12.4 billion in the first six months of the year.

Music industry recording sales dropped 1.9 percent to US$13.2 billion overall in the first half of the year, compared to US$13.4 billion in the same period of 2004.

Lower retail prices for CDs in some key markets, a small decline in DVD music video sales and the continued impact of illegal downloading and CD burning caused the on-year decline, the IFPI said.

"The figures show online and mobile sales making a significant impact on the world music market for the first time," the IFPI said.

The surge in digital music sales is being driven by increased use of broadband Internet services, portable digital music players and 3G (third generation) mobile phones, IFPI said.

Digital music is spreading fastest in the world's top five markets, the U.S., U.K., Japan, Germany and France. For example, sales of single track downloads in the U.S. during the first half of the year rose almost threefold to 159 million compared to the same time last year, the IFPI said.

In Europe, which the IFPI highlighted as a problem area for illegal digital music swapping, downloads did make some gains. Single track downloads increased tenfold to 10 million units in the U.K. during the first half of the year, and in Germany, to 8.5 million from 1 million units a year ago.

The IFPI also highlighted recent wins in its war on Internet piracy, saying recent court victories against unauthorized file-sharing services such as Kazaa have begun to help shift the balance in favor of legitimate businesses.

Last month, a judge in Australia ruled that the operators of the Kazaa file-sharing network authorized the widespread violation of copyright laws. The judge ordered that significant changes be made to how the Kazaa service works, but stopped short of ordering the peer-to-peer file-sharing service to be shut down.

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Dan Nystedt

IDG News Service
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