Authorized Music Downloads Grew In 2007

By Joseph Palenchar -- TWICE, 2/11/2008

NEW YORK — Consumers are downloading more than ever from authorized music-download sites, even if illegal file-sharing remains rampant, according to the International Federation of the Phonographic Industry and Nielsen Soundscan.

IFPI, an international music-industry association, found that 1.7 billion music tracks were downloaded worldwide in 2007, up 53 percent from the previous year. That number includes tracks from full-album downloads but excludes full-track downloads over the cellular airwaves directly to MP3-playing cellphones.

In the United States, the number of single-track downloads rose 45 percent to 844.2 million, excluding tracks from full-album downloads but including full-track downloads to cellphones, Nielsen SoundScan reported.

Those numbers, nonetheless, pale in comparison to the number of songs downloaded via unauthorized file-sharing services, IFPI said. The ratio of illegal to legal downloads was 20:1 in 2007, the group contended.

All told, digital music sales accounted for 15 percent of worldwide music-industry revenues in 2007, IFPI said. In the United States, digital sales accounted for 30 percent of music-industry revenues. The numbers include downloads to a PC, over-the-air full-track downloads to a cellphone, and cellphone ringtone downloads, IFPI said.

Despite digital gains, the music industry's total revenues worldwide continued to slip in 2007, IFPI said. Total revenue numbers weren't available.

IFPI also found that by the end of 2007, more than 6 million songs were authorized for download worldwide, up from 4 million in 2006 and only 2 million songs at the end of 2005.

Digital Music Facts
global market, in millions

	2003	2006	2007
Number of authorized songs online	1	4	6+
Single tracks downloaded¹	&200	1,110	1,700 (+53%)
U.S. market, in millions
	2003	2006	2007	% Growth 2006-2007
Single tracks downloaded²	353.0	581.9	844.2	45%
Full albums downloaded	16.2	32.6	50.0	54%
Total album sales³	618.9	588.2	500.5	-15%
Overall album sales⁴	654.1	646.4	584.9	-9.5%
Download share of total album unit sales	2.6%	5.5%	10%
1: Includes tracks on downloaded albums, excludes all mobile phone downloads 2: Excludes tracks on downloaded albums, includes cellular over-air full-track downloads 3: Includes CDs, LPs, digital albums, but not track-equivalent digital albums, where 10 individual tracks equal one album 4: Includes all albums and track-equivalent albums Sources: U.S. market by Nielsen SoundScan (www.nielsensoundscan.com), International Federation of the Phonographic Industry (www.ifpi.org) © TWICE 2008

Digital Music Growth
Music company earnings* worldwide

	Revenue	% Growth	% of Total Revenue
2004	$0.4b	—	2%
2005	$1.1b	175%	5%
2006	$2.1b	91%	11%
2007	$2.9B	40%	15%
In the United States
2007	NA	NA	30%
*2007 estimate. Revenues include downloads to PC and mobile downloads of ringtones and full tracks to cellphones. Source: International Federation of the Phonographic Industry (www.ifpi.org) © TWICE 2008

Digital Download Revenue Mix
PC Vs. cellphone,first half 2007

	PC	Cellphone
Worldwide	52%	48%
United States	67%	32%
Japan	91%	9%
South Korea	63%	37%
Full-song cellular downloads' share of global digital music (Industry Revenue In $)
First-half 2006		6%
First half 2007		12%
Source: International Federation of the Phonographic Industry (www.ifpi.org) © TWICE 2008