International record label trade body the IFPI officially reported global digital music sales figures for the first time today.
Statistics show rapid growth in music downloads, though the value of the overall market continues to decline.
Record company trade revenues from digital sales globally nearly tripled in value, from $400 million to $1.1 billion in 2005. The total number of digital single tracks downloaded online or to mobile phones rose to 470 million units, up from 160 million in 2004.
Most of the global online market comprises a-la-carte sales and is led by Apple's iTunes, the report confirms, adding: “Online a-la-carte downloads account for 86 per cent of online sales globally.”
The US, Japan, UK, Germany and France are the top five digital markets, with digital sales split 50:50 between a-la-carte download services and mobile phones.
Master ringtones are currently the largest segment of the mobile market accounting for 87 per cent of mobile sales. However, new mobile formats such as full track downloads to mobile and music videos grew faster (180 per cent increase in trade revenues) than master ringtones (120 per cent).
Despite digital growth, overall recorded music sales (physical and digital) fell by 3 per cent in 2005. Global digital and physical sales totalled $21 billion in trade revenues. On a retail price basis, the global recorded music market is estimated to be worth $33 billion.
Singles sales (digital and physical) increased by more than 75 per cent globally in units in 2005. Singles are now largely a digital format, with digital singles accounting for three quarters of total singles sales, compared to 45 per cent in 2004.
Sales of physical formats fell by 6.7 per cent in value (record company trade revenues) and 8 per cent in units. CD album sales dropped 6 per cent in value and 3.4 per cent in units. DVD music video dropped by 4.3 per cent in value but remained flat in unit terms.
IFPI Chairman and CEO John Kennedy said: "The global music market is fast becoming a mixed economy in the way fans and consumers are buying their music. It is encouraging that the markets with the strongest digital sales are also generally the best performing markets overall. In Japan digital has already made up for the decline in physical sales, and other markets should go this way. Physical music sales declined again for a combination of reasons, including digital and physical piracy, competition from other entertainment products and the shift in consumer spending to online and mobile.
"In 2006 we expect to see continued growth online and more innovative mobile services attracting music fans into the legal digital market. All our member record companies are now aggressively licensing and marketing music in digital formats. IFPI will continue to promote this exciting new market, helping shape good copyright laws to support the market's growth and sustaining actions against music piracy."