Russian

Record industry is banking on the big names (Guardian.Co.UK)

Time of publication: 04.10.2003


Mergers, the web and top acts seen as answer to 11% sales drop

Julia Finch, City editor
Thursday October 2, 2003
The Guardian

The ailing music industry is looking for big sales from artists such as David Bowie, Kylie Minogue and Sting to stem the continuing slump in record sales.

Figures released yesterday showed worldwide sales of recorded music tumbled nearly 11%, from $14.3bn (Ј9bn) to $12.7bn, in the first six months of this year. Last year's six-month figure was down 9% on the same period in 2001.

The International Federation of Phonographic Industries, which compiled the figures, blamed illegal internet downloading - "unauthorised file-sharing and commercial piracy" - for much of the decline.

The figures will increase pressure on the industry's big five - Universal, Sony, BMG, EMI and Warner - to consolidate and cut costs. EMI said last week that it was in talks to buy Time Warner's music division in a deal that could be worth Ј1bn. Warner had been linked with Germany's BMG, part of the Bertelsmann media conglomerate, which is now said to be considering a link with Sony.

The best selling albums in the first half, according to the IFPI, were Christina Aguilera's Stripped, rapper 50 Cent's Get Rich or Die Tryin' and Coldplay's A Rush of Blood to the Head. Other top sellers included Celine Dion's One Heart, Norah Jones's Come Away with Me, Avril Lavigne's Let Go, Linkin Park's Meteora and 200kmh In The Wrong Lane by Russian duo t.A.T.u.

The IFPI collects sales data from more than 1,500 record companies in 70 countries, but the bulk of the damage to global sales is concentrated in the biggest markets. First half US sales were down 12%, Japan lost 13.5%, France 9.1% and Germany 18%.

These countries, with Canada, also account for the bulk of internet piracy. In these markets, the IFPI said, the number of unauthorised downloads and copied CDs in some cases exceeded the level of legitimate sales.

Legal online sales are growing. There are now more than 300,000 tracks available online and 30 European sites offer pay-per-download or subscription services. Sales from these are expected to increase rapidly.

In Britain, album sales rose by a healthy 4% but overall music sales were down 6.1% as a result of the collapse in the singles market.

There has been growth in some areas. Within Europe, Austria and Finland showed increases as a result of successful local acts, while singles were "a great success" in Spain.

The Russian market is benefiting from a mass transition from cassette to CD, while Asia has surged as a result of some big selling compilation albums.

DVD music sales also grew. The number of DVD music videos sold was up 46% on last year, while in value terms the growth was about 55%.

DVD music videos now account for more than 5% of the global music market.

Half year sales make up only 40% of the annual total and the weight of second half buying - together with a strong series of new releases - is expected to offset some of the first half decline.

Last year's 9% halfway slump was pulled back to a 7% decline by the end of December.

Other artists who record companies are counting on to produce big second half sellers include Beyoncй, Dido, Blue, Jon Bon Jovi, REM, Pink, Nickelback, Limp Bizkit and Enrique Iglesias.


Thanks to Rhapsody.
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