Global digital music sales up 25 per cent

Legitimate digital music sales grew strongly last year but were still dwarfed by the scale of illegal downloads, despite industry efforts to adapt to the internet and offer more choice to customers.

A report by the trade body IFPI showed legal digital global sales grew by an estimated 25 per cent to €2.7 billion in trade value, to account for about 20 per cent of the industry's global recorded music sales, up from 15 per cent in 2007.

However, the rapid rate of growth has inevitably slowed - digital sales grew by more than 30 per cent in 2007 - and the scale of the piracy has eaten into traditional revenues, meaning the overall music market for last year is expected to be down about seven per cent. It fell by eight per cent in 2007.

The report showed about 95 per cent of the music downloaded last year, or more than 40 billion files, was illegal and not paid for.

As part of its response, the music industry has launched a host of alternative ways to sell music, such as through subscription models on mobile phones and Internet service providers (ISPs), and on advertising-supported models.

It has also pushed ISPs to help curb mass copyright infringement on their networks and believes it has reached a "tipping point" in persuading governments that doing nothing is not an option.

"The recorded music industry is reinventing itself and its business models," IFPI chairman and chief executive officer John Kennedy said in the report.

"Music companies have changed their whole approach to doing business, reshaped their operations and responded to the dramatic transformation in the way music is distributed and consumed."