Digital music sales slowed in 2010

By Associated Press
January 21, 2011

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LONDON — The growth in digital music sales is slowing considerably, falling into the single digits for the first time since record companies began making significant amounts of money online in 2004.

The International Federation of the Phonographic Industry said in its annual report that digital sales increased by 6 percent in 2010 — only half the growth rate in 2009 and far from the explosive expansion seen in earlier years. The federation values the market in legal digital music at $4.6 billion, but says the trade in unauthorized content remains much more important.

“As an industry we remain very challenged,’’ federation chief executive Frances Moore said before the report’s publication. “Something like 95 percent of downloads are still unlicensed.’’

The organization is a dogged opponent of illegal file-swapping, which it claims is ravaging the world music business. Its annual reports have charted its campaign to crack down on pirates — as well as the growth of the industry’s digital offerings, which now account for nearly a third of the industry’s flagging revenues.

The IFPI counted some qualified successes last year: Britain followed the lead of countries such as France by enacting a law that could lead to persistent illegal file-sharers having their Internet access limited. China, one of the music industry’s biggest problem areas said it was working to tackle the issue.