Report reveals massive rise in music downloads

A report into the digital music market has revealed that the popularity of downloading music from the Internet is increasing rapidly.

Conducted by the IFPI, the organisation which represents the recording industry worldwide, the study found that music fans downloaded over 200 million tracks last year in the US and Europe – a ten fold increase on 2003.

The survey also found that music fans now have a greater choice in digital music, with the number of sites where legal downloads can be purchased now totalling 230 – an increase of 50 in a year.

The report said that the increasing popularity for downloading has resulted in record companies gaining their first year of significant revenues from digital sales. Analyst Jupiter estimated that the digital music market was worth $330 million in the US alone and this value is expected it to double in 2005.

Sales of the new portable players, such as the runaway success of Apple's iPod and a new generation of mobile phones, are also creating new revenue opportunities.

However, the report said that "much more" needed to be done to promote the digital music business. It highlighted the point that music downloading is still very much in its infancy, with less than one in ten people downloading songs and only one person in two, in the key 16-29 age group, aware of the existence of legal ways to purchase music online.

The IFPI report also warned that internet piracy is still a "very significant" problem, but said that the recording industry's campaign of legal action against music uploaders was helping to contain it.

Commenting on the report, John Kennedy, IFPI Chairman and CEO, said: "The biggest challenge for the digital music business has always been to make music easier to buy than to steal. At the start of 2005, as the legitimate digital music business moves into the mainstream of consumer life, that ambition is turning into reality."

The latest monthly update to the survey of Internet Service Providers has also shown that there was a 4.1% increase in the number of active Internet subscriptions between November 2003 and November 2004. The market share for permanent connections continued to increase in October and now accounts for 37.7% of all connections.

This increase is thought to have occurred because of the continuing move from slower dial-up connections to the quicker broadband, cable and leased line technologies.

Dial-up, however, still dominates the overall number of subscriptions, despite its share dropping to 62.3% of all subscriptions in November 2004.

(KMcA/SP)