The Italian recorded music industry last year fell by 8% in value and 12.7% in units, according to figures released today (Feb. 25) by auditors Price Waterhouse Coopers on behalf of trade body FIMI.

The Italian recorded music industry last year fell by 8% in value and 12.7% in units, according to figures released today (Feb. 25) by auditors Price Waterhouse Coopers on behalf of trade body FIMI.

Revenue in 2004 reached just €280 million ($369 million) vs €314 million ($414 million) in 2003. At the same time, sales volume came to 31 million units, compared with 36 million units in 2003. The CD album and singles sectors posted significant declines.

The local repertoire share of the market -- traditionally a strong feature of the Italian business -- also slipped to 46.1% in 2004 from 48.7% in 2003. "The decline in local repertoire's market share is symptomatic of the difficulty in developing new acts," says FIMI in a statement. In terms of market share, international acts accounted for 49.5% of the value of the market in 2004, up from 47.5% in 2003.

Sales of classical music fell by 2% in unit terms and 13% in value, although its market share increased from 3.8% to 4.4%.

On an upbeat note, musical DVDs and digital music produced encouraging results. Musical DVD sales increased by 55.5% in volume to 1.7 million units, overtaking the CD single format for the first time.

Digital music showed healthy growth, according to an accompanying statement from FIMI. "On-line and mobile telephony business accounted for 1% of the legal music business in Italy in 2004," FIMI says. "In spite of the encouraging news from new technologies, the general situation remains one of crisis," the industry body adds. "Now more than ever the government must intervene with tax breaks, particularly for research and development and investment in new artists, in order to revive Italy's music industry."