Music Industry: Digital Download Sales Up 8%

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(Image: Stock.xchng)
(Image: Stock.xchng)

BUSINESS

  • Digital music sales totaled $5.2 billion last year
  • Downloads account for 32% of global sales
  • Rise attributed to anti-piracy laws

Although it is mostly on the decline, there is a glimmer of hope for the music industry: according to a report released by the International Federation of the Phonographic Industry (IFPI) globally sales fell by about 3% in 2011, but digital download sales are up by 8%.

Globally, digital download sales totaled $5.2 billion and accounted for 32% of total music sales. In the US, downloads are 52% of total revenue.

Over 3.5 billion albums and singles were downloaded, a 17% jump over 2010. The most downloaded song was “Just The Way You Are” by Bruno Mars, with $12.5 million in sales.

The number of subscribers to paid music services also rose in 2011 from 8.2 million to 13.4 million subscribers.

Universal Music Group president Rob Wells told reporters Monday in London, “The future is looking extremely bright. Has the industry turned a corner? I'm definitely more positive now than I've ever been."

Wells, and other music executives, are optimistic about the future, and attribute the rise in digital download sales to the increase in anti-piracy laws.

Fighting Piracy

The IFPI estimates 28% of internet users each month access unlicensed sites  that contain copyrighted music.

Frances Moore, chief executive of the IFPI, said at briefing in London that the question is not whether internet piracy should be fought, but how it is fought.

The UK’s Digital Economy Act and the US’s Protect IP Act (Pipa) and Stop Online Piracy Act (Sopa) have all generated controversy. Opponents say the laws amount to censorship and would mean internet service providers would control which websites their users can access.

In the US, Wikipedia and thousands of other websites went dark last week for 24 hours in protest. Moore says this debate is good news for the industry because anti-piracy efforts are now being reported on in the media.

France, South Korea, New Zealand, Italy and Spain have, or are in the process of, implementing anti-piracy laws. In France, illegal downloads have dropped 26% since anti-piracy laws went into effect, while at the same time, sales on iTunes jumped 23%.

The IFPI hopes search engines will work to prioritize legal music sites which would make it difficult for illegal sites to acquire advertising.

Major digital music services are available in 58 countries.

Key Statistics - Global Music Industry (IFIP)

  • In 2011, digital music sales totaled $5.2 billion. Sales in 2010 totaled $4.8 billion.
  • The number of paying subscribers to music services rose from 8.2 million in 2010 to 13.4 million in 2011, a 65% increase.
  • In the first 10 months of 2011, Swedish-based music streaming service Spotify’s subscriptions accounted for 84% of all digital music revenue.

By Melina Druga for
Melina Druga is an American writer and editor. She is the author of Enterprising Women: Practical Advice for First Time Entrepreneurs.

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