Digital Music Sales Climb 40%

Record companies' revenue from digital music sales rose 40 percent to $2.9 billion over the past year, but the growth is still failing to cover losses from collapse of international CD sales, the International Federation of the Phonographic Industry (IFPI) announced today. The body, which welcomes French President Sarkozy's clampdown on copyright laws, said the increase in legitimate music sales did not come close to offsetting the billions of dollars being lost to music piracy, with illegal downloads outnumbering the number of tracks sold by a factor of 20-to-1. Although digital revenue tripled in 2005 and doubled in 2006, the IFPI says that this year's 40% increase shows that digital music sales are slowing, and furthermore that the sales have failed to make up for the decline in CD revenues. IFPI chief John Kennedy said the plan is "the most significant milestone yet in the task of curbing piracy on the Internet."

News source: AP

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10 Comments

Hmm. I think that:

1) Keep at it. I wouldn't expect digital sales to completely overtake physical cds yet. Give it a bit more time before concluding that digital might not be the way.

2) Market it more. Now that more and more sites are offering music for sale, it needs to get out to everyone. (I'm just talking about unaware people who don't use the internet too much)

3) Everyone knows you can buy a cd in a store. You even expect it in some places. Not everyone knows that you can buy online, or that you can buy elsewhere than iTunes.

4) Offer DRM-free high quality music for a cheaper price than a cd (less than $15.00) everywhere and I think digital music sales should skyrocket.

also not everybody have a credit card or want one....
sell in cd stores places CD cards to buy music FROM different stores... don't lock it please.

There's 3 reasons why I still buy physical CD's. Here's why in order of importance:

1- The quality is just not good enough. Some independent labels now offer FLAC download (a lossless format) that offers the exact same quality of music that you would find on an ordinary physical CD. So, I don't see why big digital music providers like Itunes and the Zune marketplace don't offer them. I mean, why the hell would I want a degraded music file when I can have better quality on a CD and even more when a lossless alternative exist!?!? I makes no sense to me.

2- DRM... Well I don't have to explain myself here, I think pretty much everybody agrees with the fact that the files that we buy shouldn't be limited and crippled with DRM. CD's are not, so the files that I buy should offer the same flexibility that I have with a CD. If I can rip a CD to mp3 or FLAC, I don't see why I couldn't burn an album to CD or put it on any hardware that I want.

3- Proprietary format sucks. I want a standard between the current and future online music store. I don't want to be stuck with 2 or more format (for a same quality range that is). mp3's and FLAC have been the de facto format for years, why not use them? why complicate things?

anyway, that was my 2 cents

Just some friendly rebuttals:

1 - It's been shown in blind tests that very few people if any can tell the difference between a high quality AAC, Vorbis or even MP3 file and music on a CD. MP3 did get a tarnished reputation for sound quality early on because so many people were using horribly low bit rates. With the large drives we have today that really isn't the case anymore.

2 - DRM for music is pretty much dead. More and more online stores are dropping it, even Sony BMG amazingly.

3 - This is also changing, more stores are now offering mp3 which plays on everything. Also keep in mind that AAC is also an open standard that should play on any modern player, the only proprietary part was Apple's DRM. See No. 2.

I just can't imagine carrying around bulky discs that only hold 74 minutes and require large devices with moving parts. The only place they are really used a lot still is in cars. I remember showing a Laserdisc to my little cousin and his astonished reaction to seeing such a huge "DVD".

I figure the next generation will look at CDs the same way.

Top reasons why I don't buy CD's or buy music online:

1 - The music industry has gone to **** and they only mass-produce pop idols with no real "musical" talent anymore.

2 - The only real music comes from Europe and some small cities in America/Canada.

3 - Music by it's nature requires musicians, that play instruments. The Music "Industry" is only interested in Entertainment it can sell to the masses and not "Music" so they have no rights calling themselves a "Music Industry" when it's really an "Entertainment Industry".

4 - The only music I listen to is generally of Eurpean origin, and metal in nature, too bad iTunes, Napster, etc haven't picked up on the niche markets as much as they flood it with entertainment.

5 - This is to the RIAA: You're doing more harm than good, just stop already...

the IFPI says that this year's 40% increase shows that digital music sales are slowing

That's incorrect. The rate at which music sales grow is slowing. Music sales still continue to grow.

I buy occasional songs digitally but for me the restrictions on re-downloading the same songs (in the event of a computer accident) put me off too much. And iTunes I find too restrictive in that you can only activate 5 machines in a 6 month period to listen to purchased music.. that's all well and good but i'm pretty forgetful and I never remember to unregister my machine when I reinstall and got a rather snotty email back from Apple last time saying that, essentially, they would only do a reset of all my registered machines "just this once" - hm, thanks!

"the increase in legitimate music sales did not come close to offsetting the billions of dollars being lost to music piracy"

What a shocking surprise. Yet, people will still feel this illogical sense of entitlement and just take what they can and justify it so they don't feel guilty about their criminal actions.

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