Music sales continued to fall worldwide in 2003, industry group the International Federation of the Phonographic Industry (IFPI) said yesterday, UK music sales remain 'resilient'.

Blaming both physical and digital piracy for 2003's 7.3 per cent decline in the value of music sales, the report adds blame for increased competition from other entertainment forms that helped cause the music industry's fourth year of decline.

Global music generated $32 billion in sales in 2003 for unit sales of 2.7 billion, including music videos.

The UK and Australian markets were the only ones to see growth: Australia saw 5.9 per cent climb in sales, while the UK saw a tiny 0.1 per cent climb.

US music sales fell 12 per cent in the first half of 2003, but this improved in the latter half of the year to the extent that year-on-year decline came to just 6 per cent. Apple launched its US-only iTunes Music Store in April 2003.

US digital download services sold 19.2 million song downloads in the second half of 2003, the report says. Online CD sales increased 3.4 to 5 per cent in volume in the US and climbed from 5.6 to 6.6 per cent of total units in the UK.

IFPI chairman Jay Berman said: “Global music sales had another difficult year in 2003, under the combined effects of digital and physical piracy and competition from other entertainment products. However there are some encouraging signs, particularly in the US market where the increase in album sales of late 2003 has continued into this year, and in the UK and Australia. Meanwhile, music video sales are rapidly becoming an important revenue stream for the industry.

"Looking to the future, the recording industry is responding on several fronts. Record companies are making available a large volume of music catalogue for consumers to access online," he explained.

And in another warning to music pirates he said: "At the same time they are stepping up the fight decisively against online piracy, starting legal actions against illegal file-sharing that will be extended in the coming months.”