ARIA plans digital chart.

Australia's overall recorded music market in 2005 declined by 4% in volume to 63 million units and by 9.5% in value to A$547 million (US$382.9 million) from 2004's figures, according to statistics released today (March 27) by the Australian Recording Industry Association (ARIA).

ARIA's full year figures for 2005 incorporated digital data for the first time. Digital sales accounted for 4.9 million tracks with a value of A$7.9 million ($5.53 million).

Digital purchases accounted for 1.4% of total sales in value. Over one third (35%) of that overall value was earned during the last two months of 2005, following the October launch of Apple iTunes in Australia. Apple Computer Asia Pacific, which has not released its Australian sales figures, had no comment.

Domenic Carosa, CEO of Melbourne based digital rights company Destra Corporation tells that ARIA's figures "legitimize the whole concept of digital music."

Highlighting the rise in digital sales, ARIA will announce this week plans for a digital chart. "We applaud ARIA's move to set up a digital chart, albeit a year too late in our view," says Carosa.

Market research company IDC (International Data Corporation) expects the local digital market to grow by 45% in the next four years.

However, Ian Harvie, executive officer of the Australian Music Retailers Association (AMRA), says physical products still account for the bulk of music sales. Melbourne-based AMRA represents 700 of 1,100 music retail stores.

"It puts things in perspective for the 20% to 25% of retailers who have digital capability. After all the hype and column inches, online sales are only 1.5% of the market," he says.

The growth of the digital market is to compare with the nearly 20% decline in physical CD singles sales. They fell from 9.2 million units valued at A$26.6 million ($18.2 million) in 2004 to 7.4 million units at a value of A$21 million ($14.7 million) in 2005.

CD album sales fell by 4% to 46.2 million units from 48.2 million. CD sales value experienced a 9.5% drop year-on-year, from A$509.8 million ($356.8 million) to A$461.1 million ($322.7 million).

Music DVDs and videos dropped by 15.5% in unit sales to 4.4 million and by 17.20% to A$55.3 million ($38.7 million) in value.

ARIA attributed the drop in the physical market to competition from DVDs and console games, and the rapid penetration of broadband Internet access into households.

In a statement, the Sydney based association said, "While broadband provides the necessary platform for the development and success of legitimate online businesses, it also makes it easier for illegal Internet downloading of music to occur."