LONDON (Billboard) - The global recorded music market fell
for the seventh consecutive year in 2006, and the slide is
accelerating in 2007, according to figures published by a music
Sales fell 5% year-over-year to $19.6 billion, said the
International Federation of the Phonographic Industry (IFPI), a
London-based group that represents the major record labels.
Against a backdrop of shrinking CD sales and piracy, the
value of physical music shipments tumbled 11% to $17.5 billion
last year, the IFPI reported in its Recording Industry in
Numbers 2007 study. Digital shipments through mobile services
and the 500-plus recognized online music services jumped 85% to
The results "reflect an industry in transition," IFPI
chairman and CEO John Kennedy said.
"We hoped that the decline in physical sales would be
offset by the increase in digital sales, giving us the 'holy
grail.' But while digital sales have grown as expected,
physical sales have fallen by more than expected," he said.
"Unfortunately, this trend has continued in 2007," he
added. "Physical sales continue to drop at a faster pace than
we had hoped for, particularly in the U.S. (down 7.3%) and now
also in the U.K. (off 6.7%) -- a market that had shown
The lion's share of blame, Kennedy said, should be leveled
at piracy, which he described as the biggest problem the
Thanks in no small part to the industry's legal actions to
shunt copyright pirates, illicit file sharing is relatively
stable, he said.
However, with about 20 billion illegal files downloaded
last year, the volume of illegally distributed works remains
"unsustainably high," he noted. During the same period, 795
million single tracks were legally downloaded online.
Regarding digital shipments, the IFPI tracks online, mobile
and subscription services but does not include monophonic and
polyphonic ringtone revenue. Digital formats accounted for 11%
of total global shipments in 2006, compared with 2% of the
overall pie in 2004.
Record labels' income from performance rights collections
in 2006 improved 8% to $728 million. "We believe this sector
has tremendous potential," Kennedy said. "Synchronization,
ad-funded business models and artist/label joint ventures are
also areas showing exciting growth."
Despite the global decline, 12 countries -- Japan, Russia,
South Africa, South Korea, Ireland, Argentina, Indonesia,
Hungary, Malaysia, India, China and Venezuela -- posted growth
in their respective recorded music markets during the year.
The top 10 respective recorded music markets in the world
last year were the U.S., Japan, the U.K., Germany, France,
Canada, Australia, Italy, Spain and Mexico.
On digital value alone, the top 10 markets were the U.S.,
Japan, the U.K., South Korea, France, Germany, Canada, China,
Italy and Australia.