Global music sales out of tune

Digital pirates waylay biz

The global music industry continues to watch sales plummet and regardless of what is in the marketplace, the blame remains squarely on digital pirates.

Worldwide sales of recorded music slipped 7% to $32 billion in 2002. Downturn, which measures 8% on a unit basis, is slightly lower than the 10% decline registered for the U.S. market last year — its third fall in as many years.

The Intl. Federation of the Phonographic Industry released the datat Wednesday and continued to finger digital piracy as the principal culprit.

CD burning and online downloading are growing unabated in popularity worldwide, IFPI topper Jay Berman said.

“Widespread use of illegal sites, made easier with the growth of broadband access in the major markets, is affecting an industry that is also having to compete with increased sales of other entertainment formats such as DVD films and new videogame consoles,” he said.

But Berman did concede that economic troubles and stiff competition from other media were doing their share of damage to the CD market.

On a brighter note, he added that “there are exciting new opportunities opening up to music,” such as legitimate online music services. The past few months have seen several new sites go live, including Dotmusic.com, Popfile.de, Hmv.co.uk and Imusica.com.br.

World sales were helped by relative strength in parts of Europe and especially in France, where the market logged a 4% increase in unit sales.

The news wasn’t as good in the U.K., whose 3% decline in dollar sales brought to an end the country’s five-year growth streak. And the German market fared worse, sinking by 9% in its fifth straight year of negative numbers.

Trouble spots

The Far East and Latin America, where piracy rates are the highest in the world, were also trouble spots in 2002. Sales in Asia, which was also plagued by economic troubles, fell by 10% last year. In Japan, an estimated 236 million CD-Rs were burned in 2002, while legitimate CD sales were at 229 million.

Meanwhile, major Latin American markets Mexico and Argentina sank by 19% and 23%, respectively.

New formats were a rare area of strength for the industry worldwide. Sales of DVD musicvideos grew by 58% as new titles proliferated on the shelves. The still-niche SACD and DVD-Audio formats also posted gains, though from a small base. Each format sold about a million units last year, a three-fold increase from 2001.

(Debra Johnson contributed to this report.)

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