The French recorded music market has experienced a sudden pause in its fragile recovery, labels trade body Snep revealed.

The market had shown signs of recovery earlier this year, amid suggestions that the incoming HADOPI graduated response measures - the anti-piracy system took effect last month - were deterring online piracy.

Still, digital sales are experiencing stronger growth and the industry view of HADOPI is one of "wait and see" in terms of its impact, rather than panic at this decline. The real measure of its success will be in around a year's time, although sales in the holiday season should indicate if Q3 was something of a blip.

The market went down 2.2% in trade value year on year for the first nine months of 2010, to €340.2 million ($465 million).

The physical market went down 5.4% in value to €275.9 million ($377.1 million) year-on-year, while the digital market increased 14.2% to €64.3 million ($87.9 million).

Q3 proved weak in terms of physical sales, offsetting the surprising 4.1% rise of the first half of 2010.

"This was foreseeable," says Snep VP and EMI France CEO Olivier Montfort, naming exceptionally strong sales in Q3 2009, especially with Michael Jackson's records. However, Montfort stresses that the end of the year is the right time to analyze the market. He is expecting good sales for the holiday season thanks to a strong release agenda.

Snep expressed its satisfaction with the digital market, especially with a 17% growth on downloads, including a 42.3% growth on album downloads.

"This is the fastest growing sector of the digital market," said Snep President and CEO of digital distributor and label Believe Digital Denis Ladegaillerie. Downloads represented 67% of the digital market during the first nine months of 2010. Ladegaillerie also proved satisfied with the 22% growth on streaming and subscription-based services, which now represent 26% of the digital market. The ringtone market went down 24.6%, representing 7% of the market.

Snep praised the State-subsidized music card, launched Oct. 28, which offers young consumers the chance to get double the amount of digital music for which they have paid. It also reiterated its call for a lower VAT (sales tax) rate on digital music and for the rate to be equal across Europe, to the avoid current situation where French companies are penalized by a higher rate to that of iTunes, which operates from Luxembourg.