The German recorded music market is showing signs of bottoming out.

Total sales of CDs, music videos, downloads and mobile music shrank by 3.2% in 2007, for a value of €1.652 billion ($2.57 billion). The corresponding result in 2006 was €1.706 billion ($2.66 billion).

The 2007 figures are final consumer prices including value-added-tax, reported trade association Bundesverband Musikindustrie, which represents 81% of the German record market.

The overall result, posted today, marks the 10th consecutive year of contraction for the record business in the European Union's most populous market. More than a billion euros have been wiped from the business in that time.

In volume terms, the business came to 230.4 million units in 2007, vs. 230.6 million units the previous year.

Accounting for 81% of revenue, the CD remains by far the largest source of sales in the German business. Albums generated 154.1 million unit sales in 2007, down from 156.1 million. Of that figure, CDs accounted for 148.6 million units, down just 0.6% on the previous year.

"The CD has thus retained its role as by far the most popular music carrier, belying all those who had predicted its imminent demise years ago," comments Dieter Gorny, chairman of the Berlin-based music industry association.

Breaking-out 2007 sales by format, singles declined 32.7% in volume to 10.7 million units. On the other hand, single track downloads rose by almost 40% from 25.2 million to 35.2 million units. But the market for mobile music tracks declined to 14.2 million, from 17.2 million last time. "Downloads cannot yet recoup the loss of sales in the physical market on account of the lower unit prices," notes Gorny.

After years of steady growth, the market for music video is showing signs of weakness, with sales of music DVD video contracting by 4.2% year-on-year to 13.6 million in 2007. The VHS music video format now makes no measurable contribution to the market.

The industry noted that 312 million tracks had been downloaded illegally in 2007, down from 374 million in 2006. Gorny attributes the decline to legal pressure exerted by the industry on illegal file-sharers.

Also during the year, the share of music buyers as a percentage of the total German population widened slightly from 40.2% to 41.4%, reaching the highest level in the past five years, according to the association.

The proportion of young music buyers rose slightly, to 13.3% from 11.5%, and growth was reported in the classical music segment. Dance music, rock and pop were the most popular genres with younger consumers.