NEW YORK (CelebrityAccess MediaWire) — Global Music sales dropped by almost $1.5 billion in 2010, a loss of 8.4%, according to a report by the International Federation of the Phonographic Industry (IFPI).
According to the report IFPI found that sales in the U.S. slipped by 7%, driven primarily by a steep decline (16%) in CD sales. Globally, overall physical sales were off by 14.2% year on year to $10.4bn.
Revenue from digital sales grew in 2010, to $4.6bn (5.3% on year), but this figure represents less than half of the growth from 2009. Despite this, analysts predict that digital sales will outstrip physical sales for the first time in 2012.
Analysts also predicted that while single track downloads will remain the single most important digital music revenue model, advertising and subscription models will gain in importance over the next five years. By 2015 online music revenues are expected to come from a mix of single track downloads (39%), album downloads (32%), subscription (14%) and advertising (14%).
The report also showed that the U.K., formerly the 4th largest music market in the world slipped to 5th place, while Germany moved up. Digital sales drove Germany's rise with European markets averaging a 21.6% growth in digital revenue.
"The demand for new music seems as insatiable and diverse as ever, and record companies continue to meet it," said Frances Moore, chief executive of the IFPI. "But they are operating at only a fraction of their potential because of a difficult environment dominated by piracy." – CelebrityAccess Staff Writers