IFPI Digital Music Report 2007 - Key Facts

¤ Digital music sales estimated to double to around US$2 billion in 2006
¤ Single track downloads estimated up 89% at 795 million
¤ Available tracks double to four million, via 500 online services in over 40 countries worldwide
¤ Portable music players help drive digital music consumption
¤ New revenue streams and business models emerge
¤ Lawsuits impact illegal file-sharing, but "gatekeeper" ISPs must act to curb digital piracy

¤ Record companies' digital music sales are estimated to have nearly doubled in value in 2006, reaching a trade value of approximately US$2 billion (up from $1.1 billion). The split between online and mobile remains fairly equal, but varies substantially across markets. Digital sales are estimated to have grown from 5.5 % in 2005 to around 10 % of industry sales for the full year 2006.
¤ Single track downloads are estimated to total 795 million in 2006, up 89 % on 2005. Single track downloads and mastertones remain the main digital music formats, but other formats, such as mobile downloads, digital albums, music videos and ringback tones all saw healthy growth
¤ The number of tracks available online doubled to reach over four million in the last year. This compares to around 150,000 CD albums available in the biggest 'bricks and mortar' music stores.
¤ There are nearly 500 online music services available in over 40 countries worldwide, offering consumers a wide variety of choice and great value
¤ Portable music players help drive digital music consumption. Portable player sales totalled around 120 million in 2006, an increase of 43 % on the previous year (Understanding and Solutions). Portable player owners are more likely to buy music legally than general internet users; but the amount of purchased music stored on devices is still low.
¤ New revenue streams and business models emerge. Social networking sites exploded in popularity while advertising-supported models such as video licensing on Yahoo! Music and MSN emerged as a potentially exciting revenue stream for record companies. Music video has become a revenue stream in its own right.
¤ Advertising-funded models have become a new revenue stream for record companies. Advertisers diverted budgets from conventional broadcast and print to the Internet in 2006. Internet advertising is forecast to overtake traditional radio advertising in 2009 (Zenith OptiMedia).
¤ Digital is boosting classical music. Classical music was the fastest-growing music genre in the US, growing by 23 % in the US. There have been exceptional digital sales on particular classical titles
¤ Lawsuits are having an impact. Legal action was taken against more than 10,000 uploaders in 18 countries in 2006 including Brazil, Mexico, Poland and Portugal for the first time. The average legal settlement is now €2,420. Recent research from Jupiter shows that illegal file-sharing in Europe has been contained in the last year, in the context of a 30 % increase in broadband household penetration.