IFPI, that international assocation of 1500 or so record companies, has just issued it’s Digital Music Report for 2006. The report is a kind of State of the Union Address for the music industry – it documents some achievements, disappointments and challenges and ties it all together with a positive spin.
The good news is that digital online and phone sales of music are up nicely and now constitute about 6% of the $10B total industry sales. IFPI has high hopes for digital downloads to make up for eroding physical media sales, where the CD medium still accounts for 90% of sales. There are now about 335 legitimate online music services, with iTunes being the best known and most successful.
The bad news can be summed up in one word: piracy. IFPI is ticked off with P2P networks as well as Internet piracy, which they deem to be a ‘huge problem’. They estimate their piracy-related losses at about 10% of sales, so they figure they’re out by about a billion or so.
IFPI:06 Digital Music Report – International Federation of the Phonographic Industry
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Imagine any other industry losing a billion dollars due to piracy? They’d be up in arms. The music industry seems to have kind of accepted it for some reason, though.