Worldwide sales of music via the internet and mobile phones generated sales of $1.1 billion in 2005, up from just $380 million in 2004, with the market looking set to continue significant growth in the coming year.
According to new figures from the International Federation of the Phonographic Industry (IFPI), digital music now accounts for 6% of record companies’ revenues, up from practically zero two years ago.
Downloading songs to mobile phones spread internationally in 2005, with mobile music now accounting for approximately 40% of record company digital revenues.
The new Digital Music report claims that music is helping to drive economic activity worth tens of billions of dollars, with the legitimate digital music business steadily pushing back on digital piracy.
Commenting on the music industry, John Kennedy chief chairman and chief executive officer of the IFPI said: “Two years ago, few could have predicted the extraordinary developments we are seeing in the digital music business today and there will be further significant growth in 2006 as the digital music market continues to take shape.”
He continued: “A new wave of digital commerce, from mobile to broadband, is rolling out across the world. It is generating billions of dollars in revenues.”
New research commissioned by Jupiter Research shows that 6% of internet users regularly download legally in the UK and Germany, compared to 5% who swap files illegally.
In order for digital music to reach its full potential, however, the IFPI have identified key challenges that the industry must deal with. Above all, governments and the music industry’s partners in the digital marketplace need to place copyright, rights management and the campaign against piracy at the top of the digital agenda.
Kennedy added: “The challenges we now face are far too big for any complacency, however. In particular we need more co-operations from service providers and music distributors, to help protect intellectual property and contain piracy. It is not enough that they share in the success of the digital music business – they need to take on their share of the responsibilities as well.”
The important role of broadband in the digital music market is confirmed by eMarketers Online Music: Downloads, Streaming, Radio, Mobile report which claims that by the end of 2005 there will be over 41 million broadband households in the US and almost an equal number of digital audio players (see Digital World Transforming Music Industry).
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