Digital Downloads Up While CD Sales Sink

Worldwide, Legal Music Sales Cannot Offset Billions Lost To Piracy

(AP)  Record companies' revenue from digital music sales rose 40 percent to $2.9 billion in the past year, but the growth is still failing to cover losses from collapse of CD sales, the music industry's global trade body said Thursday.

The International Federation of the Phonographic Industry, or IFPI, said the increase in legitimate music sales fell short of offsetting the billions being lost to music piracy, with illegal downloads outnumbering the number of tracks sold by a factor of 20 to 1.

But the trade group said it welcomed French President Nicholas Sarkozy's proposal to clamp down on copyright violations.

Sarkozy called in November for Internet service providers in France to automatically disconnect customers involved in piracy.

IFPI chief John Kennedy said the plan is "the most significant milestone yet in the task of curbing piracy on the Internet."

The industry body said CD sales fell 11 percent between 2005 and 2006, and likely dropped further in 2007. Digital music revenue has so far failed to make up for the decline - and is also showing signs of slowing, the IFPI said.

From $380 million in 2004, digital revenue roughly tripled in 2005 and nearly doubled in 2006, but brought only a 40 percent increase in 2007, the IFPI said.

But it said digital downloads have grown in five years to account for 15 percent of the world's music sales, with more than 500 legally licensed music sites selling around 6 million tracks of music.

Japan is continuing to drive the digital market, the report said, particularly as a result of consumers using mobile phones to download music.

Utada Hikaru, a Japanese singer, sold more than 7 million units in various digital formats of her single "Flavor of Life" - originally released as a ringtone.

However, young Japanese mobile Internet users are also likely to be abusing pirated music, with a Recording Industry Association of Japan report showing nearly two-thirds frequently obtained illegal music through their phone.

[spadeisspade]

If music companies would stop being hypocritical about what it is you''re actually buying and stealing, I''d be more likely to buy a cd. If I am buying an artist''s music (and giving that to someone else for free is illegal), I should be able to get a new cd of that music that I bought if the cd scratches for FREE, or hell-the one cent it cost for the cd itself.

Also, it seems that the quality of what is on an album has gone down the toilet, almost like the focus is on one or two singles that will sell the cd and to hell with the rest of it. So fine, I will buy that one or two songs, which is why the companies can''t recoup the losses of the cd sales decline.

[pollroller1]

I know that the MP3 files don''t sound as good as the quality on a CD, but it works for me because I put everything in my ipod. I am a musician and I keep all of my rhythm tracks on my ipod too. I doubt that I will ever buy another CD.

[brianbwb-2009]

Posted by cwazywabt

Remember when CDs first came out? there was the promise that the music could be scratch noise free for 100 years. Some still advertise that lie when selling blank CDs.

The theory is actually correct, but the fact is the substrate, the layer on which the data is imprinted, was intentionally made to degrade over a short time, and so fragile that a scratch on the back, so small that if on vinyl would be inaudible, is enough to turn your $18 cd into an $18 beer coaster, forcing you to shell out another $18, if you back up your CD, that has been legislated, by those who had no right to do so, to be illegal piracy.

The companies are the thieves, not the downloaders and sharers, Sony even put a rootkit on millions of their CDs to call home to Sony to tell them how many times you played their CD. If you remove their rootkit, it trashes your computers CD drive. (google Sony rootkit, Mark Russinovitch)

[brianbwb-2009]

Posted by cwazywabt

Allow me. The record companies pay a standard royalty of 3.5% for new artists and 5 to 15% for established artists, but even there there is a catch, called "cross collateralization", here is how it works.

Say the company spends $100,000 to produce and manufacture a work, then another $900,000 on marketing. The artist will not get a penny until the company makes back their investment, but the calculation is based on that 3.5% to max 15% figure, not the per CD profit. This means only 3.5 to 15% from the sale of the CD is credited toward the "debt". By the time the amount is recovered, the company will likely make millions before the artist starts to receive royalties, and usually by then the CD is no longer being pushed actively, therefore most artists will see at most between $20 to $100 grand from a mega hit.

In addition, like the Hollywood writers strike, the companies base the payable royalties only on CD sales, refusing to count the legal digital downloads, just like for years they only counted vinyl sales long after CDs had replaced them.

[olebd]

The real losers are the people who think that a pirated mp3 download sounds as good as a CD. I dare anyone to play an mp3 next to a CD. The loss of sonic quality is terrible. Give me store bought CD''''s anyday.


Posted by jrsutt at 04:31 PM : Jan 24, 2008
+ report abuse

Listen to a vinyl album and a CD of the same side by side. The clarity in the vinyl recording is far superior to the CD.

[hdradio]

Have you not heard of FLAC encoding, its basically a CD recorded to a file using a lossless (FLAC) format. That means its impossible to distinquish it from the original CD.

Besides, who really cares about downloading songs illegally when you can record as many as you want legally from over-the-air HD Radio broadcasts now.
The mp3''s are much higher bitrate than you can buy and you can have your own huge collection in no time using the software and hardware from here:

http://hd-radio.home.comcast.net

[hdradio]

Have you not heard of FLAC encoding, its basically a CD recorded to a file using a lossless (FLAC) format. That means its impossible to distinquish it from the original CD.

Besides, who really cares about downloading songs illegally when you can record as many as you want legally from over-the-air HD Radio broadcasts now.
The mp3 are much higher bitrate than you can buy and you can have your own huge collection in no time using the software and hardware from here:

http://hd-radio.comcast.net

[jrsutt]

The real losers are the people who think that a pirated mp3 download sounds as good as a CD. I dare anyone to play an mp3 next to a CD. The loss of sonic quality is terrible. Give me store bought CD''s anyday.

[rational_1]

I hope that the trend that recently started by musicians, such as Radiohead, of offering music directly to their fans via the Internet is the wave of the future. With a bit of luck it will mark the death knell of the bloated music industry and their RIAA lawsuits against downloaders. Why give the artist a few cents and the music company execs all the $ when you can give the artists all the money for the product they produced?