Global trade body the International Federation Of The Phonographic Industry yesterday revealed some of the statistics behind the phenomenal rise in legitimate digital music sales in the last two years in its Digital Music Report 2006.
420 million single tracks were downloaded from legitimate sources last year, twenty times more than in 2003. Overall digital music sales via internet and mobile platforms generated US$1.1 billion in 2005, up from $380 million the previous year. All of which means that digital music now accounts for 6% of the industry's overall revenues, up from practically zero two years ago. For their part the record labels, between them, have licensed some 2 million songs to the download sector.
The mobile music sector also grew in importance in 2005, accounting for 40% of those digital revenues, although a large portion of that came from ringtone sales which remain huge and are now benefiting record labels as well as music publishers thanks to the arrival of 'realtones' which use original recordings of tracks rather than mono or polyphonic recreations.
Commenting on the stats, IFPI boss John Kennedy told reporters: "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. This is great news for the digital music market and the wider digital economy. Record companies are licensing their music prolifically and diversely. A new wave of digital commerce, from mobile to broadband, is rolling out across the world. It is generating billions of dollars in revenues, and it is being driven, to a large extent, by music - by the people who create music, who produce it and who invest in it."
On the flip side illegal downloading remained as prevalent in 2005 as it was in 2004, despite the music industry's high profile and, legally speaking, successful litigation campaign against P2P companies and individual file sharers. However, the IFPI spun this in a positive light, pointing out their research suggested P2P usage wasn't growing hugely, despite considerable growth in broadband access, which makes using the illegal services easier for web users. On these grounds the industry association reckons they are "containing" the problem.
That Kennedy bloke told the BBC: "I would love to be sitting here telling you that it had gone down. As broadband rolls out - and as there's an explosion in many countries of broadband - file-sharing is being contained. But those who've got into the habit of consuming their music for free are very difficult to shift".
Looking forward, the IFPI said the future growth of the digital music sector depended on governments and the music industry's partners in the digital marketplace (that's techy firms and ISPs) placing copyright, digital rights management and the campaign against piracy at the top of the digital agenda. DRM, in particular was, in the IFPI's words "a key enabler", though as we might have mentioned, not everyone in the industry the IFPI represents would agree. More on that here:
http://www.cmumusicnetwork.co.uk/interviews