Digital sales yielded an estimated $1.1 billion in revenue from Internet and mobile sales, up from $380 million in 2004, according to the IFPI “Digital Music Report 2006” unveiled today (Jan. 19)
Digital sales yielded an estimated $1.1 billion in revenue from Internet and mobile sales, up from $380 million in 2004, according to the IFPI “Digital Music Report 2006” unveiled today (Jan. 19) in London.
Consumers worldwide downloaded an estimated 420 million single tracks last year, twenty times more than two years earlier, the publication reveals.
The IFPI attributes the digital growth in part to support by rapid development in legal-music services, an increase in legitimately licensed repertoire, widespread anti-piracy educational campaigns and legal actions against illegal file-sharing.
IFPI chairman and CEO John Kennedy commented: "Two years ago, few could have predicted the extraordinary developments we are seeing in the digital music business today. And there will be further significant growth in 2006 as the digital music market continues to take shape."
In the United States alone, single-track downloads doubled year-on-year to 353 million units in 2005, according to Nielsen SoundScan data. Album downloads rose to 16 million and accounted for nearly 3% of the total U.S. album market.
In Europe, the United Kingdom led the way with 26 million single-track downloads, followed by Germany (21 million) and France (15 million).
A la carte downloads are the most popular method for accessing downloads, thanks largely to the popularity of Apple Computer's iTunes Music Store, which has already sold more than 500 million tracks internationally.
Subscription-based services are also making an impact, the IFPI notes. Subscription services count roughly 2.8 million members, up more than 80% from 2004.
The number of legal online services reached 335 worldwide in 2005, a 46% rise from 2004. The number of different tracks licensed by labels totaled more than two million, a six-fold rise over the same period the previous year.
The IFPI links the growth of the online music business to the expansion of high-speed broadband Internet services. According to IFPI-compiled data, consumers and businesses paid more than $75 billion to subscribe to broadband services last year, and the number of broadband connections jumped 26% to 190 million worldwide.
Access also improved thanks to the growth of portable digital music players; more than 60 million units were sold for a value of about $9 billion in 2005.
The IFPI predicts increasing popularity of digital music sales in 2006 as mobile phone distribution begins to match online sales in popularity. Globally, there are 1.5 billion mobile phone subscribers, of which 70 million use third-generation high-speed connections.
"The challenges we now face are far too big for any complacency, however," said Kennedy. "In particular we need more cooperation from service providers and music distributors, to help protect intellectual property and contain piracy. It is not enough that they share in the success of the digital music business - they need to take on their share of the responsibilities as well."