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Digital music booming

Associated Press

LONDON — The digital music market has more than tripled in a year, and that has helped offset a continuing decline in sales of CDs and other physical formats.

Spurred by the iPod revolution, digital music sales totaled $790 million in the first half of this year, equivalent to 6 percent of industry sales, the International Federation of the Phonographic Industry estimated in a report Monday.

That compared to $220 million in the same period last year.

Recorded music sales fell 1.9 percent to a retail value of $13.2 billion in the first half of this year, compared with $13.4 billion in the same period last year.

The digital boom, which now exceeds the value of the global singles market, was largely driven by sales in the top five markets — the United States, Britain, Japan, Germany and France, IFPI said in Monday’s report. Sales of physical formats fell 6.3 percent by value in the period to $12.4 billion, it said.

That partly reflected pressure on prices: CD sales were down 6.7 percent in value but only by 3.4 percent in unit volume. DVD music video sales fell 3.1 percent in value and 1.6 percent in units.

The United States saw a drop in physical sales of 5.3 percent in value but a strong increase in digital music sales, with single track downloads totaling 159 million in the first half of 2005, nearly three times the figure for the year-previous period.

Apple Computer Inc.’s iTunes online music store accounts for 82 percent of legal downloads in the United States. The company has sold more than 500 million songs online and about 22 million iPod digital music players.

The recording industry has also aggressively pursued computer users for alleged trafficking in pirated music online. Since September 2003, it has sued more than 14,800 of them in the United States alone.

“There is a long way to go — digital and physical piracy remain a big threat to our business in many markets,” IFPI Chairman and CEO John Kennedy said.

The report said digital sales helped compensate for a fall in disc sales in Germany, with single track downloads growing to 8.5 million in the first half of 2005 compared with 1 million a year ago. Physical retail sales dropped 7.7 percent in units.

France had the smallest fall in physical sales among the big five markets, down 2.7 percent in value but up 7.5 percent in units. French CD album sales were up 9.5 percent in units and 1.2 percent in value.

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