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Sales fall spells gloom for music industry
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Posted by: forwardone
The music industry faced more bleak news yesterday as official figures showed that revenues from all recorded music shrank 10 per cent last year.
The data released by International Federation of the Phonographic Industry, the industry trade body, show that the growth in digital downloads slowed in 2007 and failed to compensate for crashing CD sales.
The figures will make depressing reading for music executives as they gather for MIDEM, the industry's biggest annual conference in Cannes tonight.
IFPI said digital sales could be enhanced if record labels and telecommunications companies made it easier to listen to music on mobile telephones; if Apple was to co-operate on producing industry standards on software; and if piracy could be curbed.
"The last of those three factors dwarves the others," said John Kennedy, chairman and chief executive of IFPI.
"Illegal downloads still outnumber legal by 20 to one. I am relieved that the proportion hasn't grown since last year, but I am horrified at a ratio of 5:95 for legal sales," he added,
Mr Kennedy said the solution lay in discouraging younger people from illegal swapping of music in digital form and that internet service providers were key in doing so.
He said he wanted other countries to follow the example of France, where the government is seeking to make ISPs responsible for illegal file-sharing and adopt a "three strikes and you're out" policy to remove internet access from repeat offenders.
One chief executive of a major entertainment company expressed doubt earlier this week that any such action would be replicated in the US or Asia, although he added that European governments, including the UK, had made encouraging noises.
The IFPI figures denote a slowing in the growth of digital sales, which tripled in 2005 to $1.1bn, almost doubled in 2006 to about $2.1bn, but rose only 38 per cent to $2.9bn last year.
By contrast, physical sales, which includes CDs, tapes and vinyl, fell from $21.1bn in 2004 to $19.6bn in 2005, $17.5bn in 2006 and by 16.7 per cent to an estimated $15bn in 2007.
Avril Lavigne's hit Girlfriend took the top slot as biggest selling digital single of 2007, with 7.3m downloads.
ft.com
Posted by: forwardone
It`s now the world of downloads. I think the music industry got far too complacent about the impact the Internet would have on sales, and didn`t respond fast enough.
Posted by: Spunner
Of course profits are dropping - music's been overpriced for decades - when prices come down to 'realistic', profits will fall. But they will stabilise.
Posted by: forwardone
And over here in the UK they tend to be more expensive than the same thing in the US. Agreed, VAT is higher than Sales Taxes, but I can`t see that accounting for the often big differences in CD prices.