Digital music sales starting to stagnate

Ronny Kerr · April 28, 2010 · Short URL:

IFPI report says music industry made $1 billion less in 2009, piracy is still to blame

chart1Digital music sales grew 9.2% in 2009, but it's still not enough to make up for the industry losses. Global music sales withered by 7.2% from $18.3 billion to $17 billion and digital sales can't recoup that $1.3 billion.
The data, published in the International Federation of the Phonographic Industry’s "Recording Industry In Numbers" report, reaffirms the ill health of the overall music industry, which has seen sales slack every year since 1999.

Incidentally, 1999 also marked the first release of Napster, the online music file sharing service that industry executives tend to see as the seed that spawned a universe of illegal online piracy and the downfall of music sales. While the industry has started to look in the mirror and update itself to match the innovation of the Internet age, the old resentment still lingers, meaning piracy still gets the brunt of the blame.

"The global music business is continuing to fight its corner, investing in talent and developing new business models despite the problems of a market rigged by piracy," commented IFPI chairman and CEO John Kennedy. "There is a huge battle ahead, but also signs that the tide of opinion among governments is shifting as piracy's impact on the economy and jobs becomes clear. There is no doubt in my mind that growth is within reach for the music business - it depends, to a large extent, on how quickly governments can act to deal with piracy and, in doing so, tackle a market distortion that overshadows not just music but all the creative industries."

When it comes to innovation, it seems the music industry is relying heavily on Apple, whose iTunes Store, the the biggest music seller in the U.S., accounts for over a quarter of music sales domestically. In spite of the that, even the iTunes Store is seeing stagnating sales, having only marked 1.1% growth in North America in 2009. Sales in most other countries match this trend towards stagnation.

New innovations, like subscription services on Spotify or similar sites, could breathe new life into the tepid pond of music sales, but it's ultimately up to the consumer to decide whether these services are worth the time and money.

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