14 DAY TRIAL // The music industry is taking hit after hit and, this time, it’s not digital sales that are to blame. Global sales of music, including physical and digital sales, and royalties, have gone down by $1.4 billion in 2010, an International Federation of the Phonographic Industry report reveals.
The annual report shows that, far from covering the “holes” left by sales of physical copies, digital sales of music have also taken a serious hit in that they’re no longer compensating for poorer sales in brick and stone stores, Paid Content reports.
As if that wasn’t enough, royalties have also decreased in the past year, and, even though the drop is not as significant as in the other two categories, it’s a drop nonetheless.
Overall, global music sales dropped in 2010 by 8.4 percent (or $1.4 billion), reaching $17.38 billion. As expected, physical sales continued to lose ground, dropping another 14.2 percent in the past year.
However, whereas in previous years, digital sales somewhat compensated for poorer physical sales, in 2010, this trend showed the first signs that it was coming to an end.
The growth of digital sales was merely of 5.3 percent worldwide and 1.2 percent in the US, which means they’re no longer making up for the lack of strong physical sales.
Moreover, in the US, there was a “steep decline” in mobile music sales. In the UK, for the first time in a long while, royalties took a dip, The Guardian also reports.
Consequently, the music industry is hurting – and bleeding money, leaving record labels worried about their future and more determined than ever to try and find better ways of fighting online piracy.
“Illegal services that do not pay performers and producers for the music they distribute continue to undermine investment in artists and hit jobs in the creative sector,” IFPI chief executive Frances Moore says.
“We believe that with the help of governments and internet intermediaries worldwide we can turn the tide on piracy,” Moore adds.
“Governments want to create a sustainable digital economy that delivers jobs, growth and tax revenues. This is only possible if intellectual property rights are respected in the digital space,” the IFPI honcho underlines.