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Thursday, October 10, 2002
 Global sales of recorded music down 9.2% in the first half of 2002
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Message Text: World sales of recorded music fell by 9.2% in value and by 11.2% in units in the first half of 2002. Sales of CD albums, the most popular format worldwide, saw a 7% fall. Single sales also dropped, by 17%, while cassettes continued a long-term decline, falling by 31%.

The interim sales traditionally only account for around 40% of the annual figures, with the remaining 60% of sales occurring in the busier second half of the year. A large number of highly anticipated releases from major artists are scheduled for the second half of the year and this could lead to some recovery in the latter half of 2002.

The decrease reflects a number of factors including weak economic conditions, the widespread availability of free music, and competition from other leisure products such as DVD video, mobile technologies and computer games.

The increased downloading of music from the internet and mass CD-R copying has affected sales, particularly in the more developed and technologically-advanced markets such as North America, Japan and parts of Western Europe.

Jay Berman, Chairman and CEO of IFPI said: "The figures are disappointing but not unexpected. The industry is in transition, with widespread CD-R copying and internet downloading continuing to affect sales. However, there is no doubt that the music on which our business depends is more in demand than ever, and it is encouraging that our member companies appear to have an exceptionally strong release schedule in the second half of the year. Meanwhile, the recording industry is taking positive steps to provide legitimate, consumer-friendly online services."

Compared to the same period in 2001, the world's largest markets USA and Japan, representing more than 50% of the world's music sales, saw decreases. The USA was down 6.8% in value and Japan was down 14.2% in value.

Western Europe was down overall by 7.5% in value and 7.2% in units. France, however, maintained its positive sales trend with a rise of 5.2% in value. France has now moved to fourth largest world market, displacing Germany. Sweden also saw a small increase of 0.7% in value. Sales of local repertoire were strong in both countries.

Asia's performance was poor overall, with drops of 15.6% in value and 20.4% in units. A combination of weak economies, competition from other leisure products and piracy has contributed to the fall. Only Singapore bucked the trend, seeing a rise of 5.7% in value and 3.8% in units, mainly driven by the success of regional acts in the country.

There was a more mixed picture in Latin America. Its second biggest market, Brazil, saw a recovery from last year's sharp declines with an increase in 7.1% in value and 18.7% in units. Chile was also up 29% in value. But the positive figures were not enough to counteract falls elsewhere. Mexico, the world's eighth largest market, declined 15%, largely the result of endemic CD-R piracy. There was also a massive 75.9% fall in Argentina, due to ongoing political and economic chaos.

CD-R copying and downloading have put pressure on the CD format. However, there were some positive growth indications in the as yet relatively small market for Super Audio CD (SACD) and DVD Audio. Although limited to a few markets, there have been increases of over 100% already in the first half of the year, compared to last year's full annual figures.

For the first time IFPI has tracked world sales of music video*, which show strong growth and are not included in the audio market figures. Music video is a growing revenue stream for music companies. A higher penetration of DVD players and a wealth of new releases over the period have driven market growth by 100% or more in many markets. DVD video sales have more than doubled in the period. The market share for DVD in the UK, for example, has gone from 33% to 63% of total music video sales. In Germany, DVD now accounts for 75% of music video sales in the country - one of the biggest European markets for the format.

*Music video sales, measured for the first time by IFPI, include only the proportion that is sold through music companies.
 
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