The music industry is seeing the first signs of recovery, the Financial Times reports.

The FT says US album sales are up 7 per cent so far this year, and that in Britain total music sales were up 3 per cent in the 12 months to April.

The FT suggests the upturn is a result of more effective anti-piracy initiatives and the rapid spread of legitimate online music services, such as iTunes.

International Federation for the Phonographic Industry president Jay Berman said: "The sector looks as though it has finally begun to turn; some markets are still tough and piracy remains a major issue. But the rate of decline is slowing globally and sales are picking up in the US."

FT reporter Tim Burt writes: "Amid the industry excitement at the growth of online music, digital downloads are making only modest in-roads into the total industry sales of about $32bn, down 7.2 per cent last year.

"Downloads accounted for 1.3 per cent of the US market last year, the most "connected" market, while the internet as a whole represented just 5 per cent of the music retail sector.

"Even the most optimistic forecasts suggest the paid-for digital music market will be worth $2bn in the US by 2007 and €1.3bn ($1.6bn) in Europe. While welcomed by an industry struggling with structural decline, it remains a fraction of the traditional market. That market has been undermined by a flood of counterfeit CDs, many of them produced by criminal gangs, while the online industry is competing with more than 700m illegal tracks available from file-sharing sites such as Morpheus and KaZaa."

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