Digital Music Sales Increase

    June 20, 2008

Music sales dropped to their lowest level in a decade even though there was an increase in digital sales but it did not make up for falling CD sales according to a report from the International Federation of the Phonographic Industry (IFPI).

Worldwide music sales fell 8 percent to $19.4 billion in 2007. Sales of CDs dropped 13 percent to $15.9 billion. Sales of downloaded songs and mobile ringtones increased 34 percent to $2.9 billion.

Digital sales "are growing healthily but, crucially, not fast enough to arrest the overall decline of the market," John Kennedy, chairman and chief executive of the IFPI told the International Herald Tribune.

The report said that dealing with online piracy is key for the industry. "Even the most innovative business models are totally undermined by free music," Kennedy said. There were 30 billion pirated downloads in 2007, with 39 percent of U.S. teens using file sharing networks.

The U.S. music industry lost $5.3 billion to digital and physical piracy, the report said, referring to data from the Institute of Policy of Innovation.

The report said working with Internet service providers is a priority and indicated more than two-thirds of file sharers would stop illegally downloading music if they received a warning notice from their service providers.