Global music sales slip again

AMSTERDAM - Global music sales slipped again in 2004, but after four years of declines the record publishers will see the return of growing revenues in 2005 due to online stores and music DVDs, a survey says.

Hit by piracy, internet song swappers and saturated markets, music sales fell in 2004 by one per cent to US$32.1 billion ($45.9 billion). But 2005 will make up for the damage with a one per cent increase, research group Informa said on Monday.

Over the next six years, the music publishing industry will return to the US$39 billion sales levels last seen between the years 1997 and 2000, before the invention of cheap CD burners and file swapping services such as Napster and KaZaa.

Legal internet song shops such as iTunes from Apple and Connect from Sony Corp have opened in many countries. The services connect easily to portable music players, such as iPod, which have become very popular.

On-line music has not made big bucks yet, contributing just 0.9 per cent of total music revenues last year, but have changed the image of the industry, said Informa analyst Simon Dyson.

"It has made the music industry sexy again," Dyson said.

Online music sales will rise to 8.8 per cent of sales by 2010, Informa estimates.

Legal clampdowns on illegal song swappers and the growing popularity of music videos also have a big impact.

Already last year, music video sales, DVDs containing video clips or concerts, rose by an estimated 26.3 per cent to US$2.7 billion. It was not enough to prevent the overall decline as audio-only sales fell in 2004 by 2.9 per cent to US$29.4 billion.

This year, music video sales will rise again, by 17.6 per cent, against a backdrop of stable audio-only sales.

"Music videos are a new catalyst for growth, just like CD was a new catalyst when it came out," Dyson said, recalling that the introduction of the CD eventually trebled sales of the record industry from around US$12 billion in the early 1980s.

Much of the music sales growth will occur in less developed markets such as China and Russia, which are forecast to become the fifth and sixth largest CD markets respectively by 2010.

In the United States, album sales rose nearly 2 per cent in 2004, after a three-year slump, according to figures from a Nielsen SoundScan survey earlier this month.

- REUTERS