Although the digital music business surpassed the $1 billion threshold in 2005, the rise in the new format was not enough to arrest a 3% slip in the total trade value of the recorded music business wo
Although the digital music business surpassed the $1 billion threshold in 2005, the rise in the new format was not enough to arrest a 3% slip in the total trade value of the recorded music business worldwide, the IFPI reported today (March 31).
The global music market, comprising physical and digital formats, slipped to a value of $33.45 billion in 2005, the labels association said in its annual trade report.
During the period, the CD format shrank in trade value by 6% year-on-year to $17.019 billion. Coldplay's third album "X&Y" was declared the biggest-seller last year, shifting eight million copies worldwide.
Meanwhile, the music DVD format lost ground, slipping 4% for a value of $1.54 billion.
In the "World Sales 2005" report, IFPI chairman/CEO John Kennedy cited a number of factors for the weakened performance of the physical format, namely digital and physical piracy, competition from other entertainment products and the shift in consumer spending to online and mobile.
One of the strong points was the performance of digital sales, which soared by 188% in value to $1.143 billion from $397 million in 2004. A-la carte downloads generated 86% of all online sales, the IFPI said. Mobile music accounted for roughly 50% of digital sales.
According to the IFPI statistics, the digital music format leap-frogged the singles format in value to become the third most lucrative format. Singles generated $721 million in value last year, down 12% from the previous period.
In the report, Kennedy said the figures generally reflected a trend in which the market is becoming "a mixed economy in the way fans and consumers are buying their music."
He noted, "It is encouraging that the markets with the strongest digital sales are also generally the best performing markets overall."
The United States market was again measured as the biggest, by some distance. Rounding out the top ten, in order, was Japan, the United Kingdom, Germany, France, Canada, Australia, Italy, Spain and Brazil.
The IFPI collects data from its national groups. The physical figures are collected from its 1,400 members and its digital sales are compiled from the major record companies.