Global music sales tumble ... again
Data puts pressure on industry to cut costs, pursue mergers
LONDON, Oct 1 — The battle-weary music industry surveyed the wreckage of another dismal six months on Wednesday as global data showed music sales tumbled 10.9 percent, piling more pressure on music companies to do deals to survive.
DESPITE BIG HITS from pop queen Christina Aguilera and rapper 50 Cent, Internet downloading and CD-burning continued to ravage the industry, dragging music sales down to $12.7 billion in the first half of this year, a leading industry body said.
The figures are likely to turn the heat up on a series of negotiations between top music companies as they scramble to cut costs after three years of declines.
EMI Group, the world’s third biggest music company, announced last week that it was in talks about taking over AOL Time Warner’s recorded music arm in a deal that sources familiar with the situation say could be worth more than $1.5 billion.
AOL Time Warner’s Warner Music has also been exploring a joint venture with German media rival Bertelsmann’s music arm BMG. However, those talks have got bogged down and Bertelsmann is now courting Sony Music, other sources said.
The International Federation of the Phonographic Industry (IFPI) said in its interim report that global recorded music sales fell 10.9 percent in value terms and 10.7 percent in unit terms, outstripping a 7.2 percent fall in 2002.
Global sales of CDs, which make up almost 90 percent of total sales, fell 11.7 percent in the first six months. However, the IFPI said it expected a stronger second half to limit the full-year decline to between seven and eight percent.
“It’s a very difficult landscape to fight back against but we are. We have gone through the worst period and we have enough positive signs about how online business models can go forward,” IFPI Chairman Jay Berman told Reuters.
Berman said the United States, Japan, France and Germany —the world’s biggest music markets — showed dramatic declines.
There have been bright spots however, the IFPI said.
A string of hits in a traditionally thin release period included Aguilera’s “Stripped,” 50 Cent’s “Get Rich or Die Tryin,”’ Coldplay’s “A Rush of Blood to the Head,” Celine Dion’s “One Heart” and Avril Lavigne’s “Let Go.”
Sales in Austria, Finland and Russia rose while UK album sales posted gains and Hong Kong and Australia made a recovery.
DVD music took off, accounting for more than five percent of sales, and legitimate online music broadened its reach.
