Digital music sales are booming, driving growth in album and singles sales despite declining retail sales in the UK.

Record label industry association the BPI yesterday revealed its third-quarter report on the state of the UK music market.

It claims that UK single track download sales are reaching 25 million since the format launched, with 5.7 million sales in 2004 and 16.9 million sales already in 2005.
Digital sales are 60 per cent of UK singles market

Weekly sales regularly top 500,000, the BPI said, revealing that digital downloads now account for over 60 per cent of the entire singles market. They accounted for just 3.6 per cent of that market at the beginning of 2004.

Digital's share of the Top 75 singles chart is also growing. When the combined chart launched in mid-April its share was 15.9 per cent and by the end of August it was 25.5 per cent, the association said.

This digitally-driven success helps offset the 21.8 per cent decline in physical single sales: with digital song purchases up 288 per cent, the overall singles market has grown an astonishing 49 per cent.
The 7-inch physical singles market has also bounced back, with 80 per cent growth in the format this year and 800,000 sales.
BPI Chairman Peter Jamieson said: "This year digital made the transition from mere potential to becoming a significant revenue stream. But this is just the beginning."
"While the record label model of investing in the best new music talent remains the same, the emergence of innovative new digital services means that the record companies can offer consumers even greater choice as to how to access their music."

Don’t steal music - artists deserve pay

However, buoyancy in the digital market is accompanied by a series of artist-hurting initiatives by the industry.

The labels want to pay artists a composer/songwriter royalty of just 4 per cent on digital sales. Artist royalty collection agency the MCPS-PRS Alliance wants artists to receive a more substantial 12 per cent slice, but has been prepared to accept 8 per cent in order to help the digital download sector grow.

Labels however have teamed up with all the major digital download retailers (including Apple) and four of the UK's major mobile telecoms networks to take the MCPS-PRS through the legal process to insist composers settle for the 4 per cent royalty it wants to pay.

This effectively puts the artist royalty collection agency here in conflict with $600 billion-worth of market capitalised companies.

Artists fight for the right to earn a living

With digital sales now accounting for 6 per cent and rising record-label revenues while the majority of other formats see sales decline, the irony of seeing artists subject to a royalty as low as 4p in every Pound hasn't been lost on artist managers.

The MMF (Music Managers Forum) last week launched its KnowMore campaign in support of the artist collection bodies.

On digital success, the Jamieson of BPI said: "Digital sales are already having a significant impact on the sector, with the singles market showing strong signs of recovery.

"In time, we expect increasing numbers of occasional music buyers to use these new legal services; as consumer choice increases the potential for growth in this sector is massive."