Global Music Income Down 8.3 Percent In ‘08 Despite Digital Uptick

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Global Music Income Down 8.3 Percent In ‘08 Despite Digital Uptick

Physical music sales are drying up ever more quickly - but still aren’t being compensated by digital equivalents, according to annual figures from the International Federation of the Phonographic Industry (IFPI) umbrella org. Despite global digital sales growing 24.1 percent to $3.78 billion and performance income by 16.2 percent last year, total sales still finished down 8.3 percent at $18.4 billion after a 15.4 percent collapse in physical sales.

The picture is far worse in the US, where physical sales dropped by nearly a third, or around $1 billion. Even with digital growing 16.5 percent to $1.78 billion and performance income a whopping 133 percent, total sales were still down 18.6 percent (the biggest drop in the world) to $4.9 billion…

The healthiest music market is still Europe, which, with sales of $7.3 billion, was still down 6.3 percent from the previous year. There, digital grew 36.1 percent to $750 million and physical sales fell back only 11.3 percent to $5.8 billion.

The takeaway - in income terms, the music business is still dangerously dependent on selling bits of plastic. Some 75 percent of global sales are still physical, against just four percent digital. Though that tips to two-thirds physical against one-third digital in the US, after stripping out emerging nations, it’s still clear why the business is so keen to stamp out piracy if it is ever going to reach its digital tipping point.

Robert Andrews

@robertandrews Apr 22, 2009 3:53 AM ET

Posted In: Entertainment, Music, Research & Metrics, Metrics

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virtual world for kids

Talking about art in CD creation, I think a lot of cost actually goes into the creation - illustration costs, printing costs, copyright costs (of the album illustrations) etc. and naturally the cost of each CD is going to be much more per physical item compared to the cost of a single digital file. Probably not all consumers will remain with buying the physical CD (probably not everyone enjoys the creatives that come with the CD packaging) when all they want is the music and selected singles they want to listen to. Maybe the music industry needs to begin the shift towards not viewing physical sales as its main source of profits, and provide a legitimate solution soon, to how they want to market their products digitally and not be fighting a losing war to piracy.

guy mccreery

Physical formats (vinyl and cd) will continue to be the de facto state of the art formats for music products for the forseeable future. This is simply because they are the sound carriers which carry the recordings closest in sonic quality to the master recording created by the artist, the recording engineer and the mastering engineer. A heavy reliance on impoverished codecs (mp3 and aac), and hardware which is not designed or sold to recreate the music experience envisaged by the artist and created by state of the art recording and mastering technology, will maintain this position. This situation will only change when artists stop aspiring to record and master to the highest possible standards (unlikely), or digital supply chains begin to focus on matching the quality of the recorded masterd as well as convenience. All this is beside the points about artwork and the sound carrier as artefact or work of art which are also enduringly important

Nacho

I don't think that digital sales are ever going to compensate the physical sales because there's a lot of art in the CD creation from each band. Many people, including me, love to buy CD's because I get exclusive and creative things by this. Only if the artists do all the creation in the internet, the digital sales will increase.