Digital music sales double worldwide in 2006

Worldwide digital music sales almost doubled in 2006 to around $2 billion, according to figures from the music industry body, the IFPI.

In its latest publication – the Digital Music Report 2007 (pdf) – it surveys the music scene from a digital perspective.

Digital sales now account for around 10 per cent of the music market, it believes, as record companies increasingly experiment with different business models and extend licensing partnerships.

Single track downloads are estimated to total 795 million in 2006, which is up 89 per cent on 2005. Single track downloads remain the main pull, but other formats – such as digital albums, music videos and ringback tones – saw ‘healthy growth’.

In terms of the size of online catalogues, the IFPI finds that in 2006 the number of songs available online doubled to four million. It also notes that classical music, in particular, saw a ‘digital dividend’.

It is not all rosy, however. The organisation notes that the increase in digital sales have not compensated for the decline in CD sales, which it describes as the ‘Holy Grail’ for the industry. It also emphasises the threat of digital piracy for emerging online music businesses.

‘Recent months have also seen digital music distribution channels diversify,’ states the IFPI. ‘A-la-carte download services, led by iTunes, remain the dominant digital format, but they compete in a mixed economy with subscription services, mobile mastertones and more recently new advertising-supported models and video licensing deals on sites like YouTube and MySpace’.

When it comes to mobile music sales, the picture is mixed and varies country by country. In Japan, a startling 90 per cent of digital music purchases were accounted for by mobile phones. The IFPI believes 2007 could prove to be a landmark year in the mobile music market, with the likes of Nokia and Sony Ericsson gearing up their music phone offerings and Apple’s iPhone on the horizon.

A Key Facts summary for 2007 can be found here.

‘The record industry today has evolved into a digital thinking, digitally literate business,’ summarises IFPI Chairman and CEO John Kennedy. ‘This is a market combining evolution and revolution, where the learning curve is changing direction on a regular basis.’

He also describes the market as ‘challenging’: Other industries, such as film and newspapers, are struggling with the same problems that we have had to live with. As an industry we are enforcing our rights decisively in the fight against piracy and this will continue. However, we should not be doing this job alone. With cooperation from ISPs we could make huge strides in tackling internet piracy globally. It is very unfortunate that it seems to need pressure from governments or even action in the courts to achieve this, but as an industry we are determined to see this campaign through to the end.’