The IFPIís World Sales figures were released today and donít make great reading for the music industry. Total music sales fell by 8% in volume terms and 7% in value, totalling 32 billion. The two largest markets (US and Japan) suffered some of the strongest declines (8% and 9 % respectively). There were mixed results in Europe, with France bucking the trend by recording growth of 4.1%, yet Spain declined by 15.6%. Europeís biggest market Ė the UK Ė shrunk by a more modest 2.2%.
So what does it all mean?
Well, it really just tells us what we already know. The CD replacement has clearly come to an end and the music industry is entering a period of readjustment during which it is going to have find itís true scale in the face of increasing competition for leisure expenditure from computer games and DVDs etc etc. Piracy has also played a significant role. It is no coincidence that Germany suffered such a steep decline and is also flooded with counterfeit CDs from the old Eastern bloc countries. Physical CD piracy is a truly global problem and will not be brought under control whilst there is such over capacity of CD production in so many countries.
Online piracy also played a role, though a far lesser one: donít forget only 37% of Europeans are Internet Users, of which just 18% use file sharing networks regularly. But, as Iíve said many times before, the real impact of file sharing is not yet being felt. It will only really hit when the young music fans who are file sharing now reach the age when they would be expect to be spending significant money on CDs. That is when the music industry may find that its core constituency has disappeared and when an 8% decline may sound like good news.