Digital music isn't halting CD sales decline

Digital music sales doubled in 2006 thanks to better distribution, but the rise hasn't made up for the decline in CD sales

Digital music sales doubled in 2006 thanks to better distribution, but the rise hasn't made up for the decline in CD sales, the International Federation of the Phonographic Industry (IFPI) said on Wednesday.

Revenue is expected to come in at US$2 billion for the year, accounting for about 10 percent of the total music market, the IFPI said in its Digital Music Report 2007.

IFPI attributed the growth to a wider range of digital music products and a doubling of the number of tracks available to four million.

The recording-industry trade group blamed music downloads from peer-to-peer networks as a continuing problem, although it said lawsuits against file-sharers and file-sharing networks have acted as a deterrent. The organization said 10,000 legal actions were taken in 18 countries in 2006.

Research shows 14 percent of portable device owners usually get their content from legal sites, but the same percentage use peer-to-peer networks for unauthorized downloads. Overall, however, IFPI said a relatively low level of music stored on devices had been purchased.

Apple Computer's iTunes Music Store was the most popular download service, although consumers saw a wider range of options for digital music throughout the year, including subscription services and ad-supported models offering content for free. Five hundred online services are operating in 40 countries, it said.

Single-track downloads brought in the highest revenue, growing 89 percent to US$795 million, IFPI said.

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Jeremy Kirk

IDG News Service
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