The report stated that record labels are becoming digitally literate; helping to change the purchasing habits of consumers as increasing numbers turn to digital technology. The number of available tracks doubled during the last year to four million and, as these tracks can easily be purchased via 500 online services in over 40 countries worldwide, this is becoming an ever more popular means of buying music.
John Kennedy, International Federation of the Phonographic Industry (IFPI) chairman and CEO, commented: The chief winners in the rise of digital music are consumers. They have effectively been given access to 24-hour music stores with unlimited shelf space. They can consume music in new ways and formats.
The report attributed much of the drive in digital music consumption to the rising popularity of portable music players. It commented, however, that, despite this success, digital music sales had not yet achieved the ‘holy grail’ that the music industry has been searching for; compensation for the decline in CD sales.
While new figures indicate that the 14% of portable player owners who pay for downloads is roughly the same as those that download them illegally, digital piracy and the subsequent devaluation of music content was still cited as a major threat to the emerging digital music business and the existing record industry.
The IFPI report stated that although the 10,000 cases of legal action against large-scale person-to-person uploaders in 2006 have helped to contain piracy, this was not the best way of dealing with the problem.
Mr Kennedy said: As an industry we are enforcing our rights decisively in the fight against piracy and this will continue. However, we should not be doing this job alone. With cooperation from ISPs we could make huge strides in tackling internet piracy globally. It is very unfortunate that it seems to need pressure from governments or even action in the courts to achieve this, but as an industry we are determined to see this campaign through to the end.
The report also indicated that 2007 could prove to be a landmark year in the mobile music market, as handset makers such as Nokia and Sony Ericsson develop their music phone series and Apple launches its iPhone.
