Global Digital Music Sales Up 40 Percent, But Overall Sales Down 10 Percent
Erick Schonfeld
23 comments »
The sale of digital music globally hit $2.9 billion in 2007, up 40 percent from 2006. But, as we’ve seen in the U.S. alone, that was not enough to offset the 10 percent decline in overall music sales to 17.6 billion, according to a report by the International Federation of the Phonographic Industry. Digital sales now account for 15 percent of the global market. Compared to other industries, music is second only to games in its transition to digital revenues. For newspapers, it is 7 percent, for films it is 3 percent, and for books only 2 percent. (All of these are global figures).
In the U.S., however, digital sales account for 30 percent of industry sales, according to the IFPI. (Nielsen SoundScan, however, says digital music accounts for 23 percent of sales in the U.S., based on different data). The report also looks at mobile sales of digital music, including ringtones. While online sales of digital music in the U.S. are nearly double those of mobile sales, there is some evidence that gap might close (or even reverse) as mobile data networks become faster. In Japan, for instance, 91 percent of digital music sales are mobile and 40 percent are full-track mobile downloads (the rest are ringtones).
Other stats from the report:
—There are more than 500 legal music services worldwide, ten times as many as four years ago.
—About 6 million individual digital songs are available legally.
—1.7 billion digital tracks were downloaded legally last year, up 53 percent.
—Tens of billions of songs were swapped illegally.
—The ratio of unlicensed tracks to legal tracks downloaded is 20 to 1.
Nobody is buying the crappy music we produce….Waaaahhh!
I’m curious to know how they measure this stuff. I bet the Long Tail is much bigger than they can judge (little guys me selling on Amie St/Snocap/etc.) And the unlicensed to legal track ratio can’t be anything other than a guess. Still, fun numbers to start arguments with.
@2 or to seek new legislation with
I’ve been spending more on music since Amazon launched its MP3 store. I’ve bought tracks almost every week. Funny thing is, my co-workers still give me a funny look about me ‘buying’ music. I give them a funny look right back.
“Tens of billions of songs were swapped illegally.”
Which bag of numbers did they pull that figure from?
I love how the general decline in all products such as houses/stocks/retail etc take into account the general economy but anything to do with entertainment, specifically music of film its got to be the illegal pirates.
Please.
Yes, I would like to know how they determined that sales were down 10%. Are they comparing 2007’s numbers to the 1990s? I would imagine that sales would have been going up over the past few years.
There are so many outright lies and half truths in there. They ‘conclude’ that there is ‘better choice’ at ‘legal’ services over p2p by comparing Limewire to iTunes. Pathetic. If the MPAA is 29% full of crap then the IFPI just lapped them. I wouldn’t call them ’stats’, I would call them IFPI talking points. The public at large seems so willing to just take an official looking report as ‘fact.’
The whole ‘you can’t compete with free’ lie/meme got decimated by Radiohead.
If someone likes iTunes or Rhapsody then they should use that service, but ignore the RIAA, MPAA and IFPI, et. al. They are utterly full of shizzle.
It seems like “digital music” is not the best choice of words for the IFPI report to use — CDs are digital music, too. “Online music sales” would probably be a more accurate description.
Well we’re on the cusp of a new paradigm for music. As sales of music as a tangible object decline, we are seeing the rise of of the music rental/subscription paradigm of the future (eg Last.fm). In a couple of years all our players will be internet connected and for a small monthly fee (which will go to the artist) will we have access to every track ever recorded.
I for one, can’t wait.
Who cares about revenue anyway? The industry cares about profit. If revenue is down, but costs are too, then we don’t know what effect that had on profit. And I imagine that distributing music over the Internet is a lot cheaper than doing so using physical supports. Therefore costs should sink and these statistics don’t really tell us if the music industry really does have something to complain about or not.
Agreed, JJ. I think the important thing now is to make sure that the traditional models of having a label system inbetween music fans and artists, siphoning off $ justified by production, PR/Marketing and tour support expenses get smashed up like Homer Simpson wailing on a weather station. Even though 0-+> looked silly with ’slave’ written on his face @ Letterman, he had a great point even back then. That old system propagates ‘art as commodity’ over ‘art as discovery’ and we need to get more money directly into the pockets of the artists who say.. don’t want to move to L.A. or NYC because they like their hometowns and are happy staying there.. or the ones who simply don’t fit inside that homogenized machine, yet can still connect fiercely with a fanbase. It’s bubbling up now, but it has to boil over. Here’s to turning up the heat on the big four. *kicks Yorick’s skull into the gutter*
The first slide implies:
====================================
2006: $2.1B is 11% => Total Revenue is $19.1B
2007: $2.9B is 15% => Total Revenue is $19.3B
====================================
But the accompanying text says overall revenue is $17.6B.
What bit did I not understand?
“What bit did I not understand?”
the difference is ” sundry expenses” for the big 4’s executives….
Why are we assuming that the article has no validity? Do we not trust the way the data is generated?
Someone should address the fact that you can search for a band on myspace or hype machine (or pandora etc) and often listen to a selection of music legally at any time. Some people will be interested and buy, some will choose to steal and others will just choose to listen to the plethora of free content online. Too many people and studies assume that music sales should stay the same or go up because of more, better, easier digital distribution. This is not the case. Just look at all the new content available online, including video, audio and text. All this content is competing for people with the same money and time as last year.
This market is increasing, as well as increases the amount of Internet users. Better is than we are prepared to make front and to be able to cover the users necessities.
The whole ‘you can’t compete with free’ lie/meme got decimated by Radiohead.
If someone likes iTunes or Rhapsody then they should use that service, but ignore the RIAA, MPAA and IFPI, et. al.
@17 | agree. lol.
People thought i am an idiot when I still buy albums!
Ho hum, I see they are still singing the same old song. Blaming piracy for the downturn in music sales! For once I would like to see these schmucks own up and blame artists for producing endless stream of horse manure. It is simple math, Crappy music = No sale!