Global Online Music Sales Doubled In 2006

Record labels have sold an estimated $2 billion worth of music online or through mobile phones in 2006, doubling the previous year's sales and accounting for 10% of the total music market, according to the International Federation of the Phonographic Industry (IFPI)' s Digital Music Report 2007.

The number of songs available online doubled to 4 million. Single-track downloads totaled approximately 795 million--up 89% from 2005. The U.S. accounted for the bulk of those sales, with 582 million single tracks sold online in 2006, up 65% from 2005.

Mobile music accounted for half of global digital revenues in 2006--although its prominence varies by country, such as in Japan, where 90% of digital music sales are mobile purchases.

The IFPI wrote that 2007 could be a banner year for mobile music with handset makers such as Nokia and Sony Ericsson developing their music phones, as well as the impending release of the Apple iPhone.

Portable players drove growth in the digital sector, while there also has been increased diversification of digital music distribution channels.

iTunes and other a-la-carte digital download services remain dominant, the report found, though they have gained competition from subscription services, mobile mastertones and advertising-supported models and video-licensing deals on sites like MySpace and YouTube.

The IFPI predicted that online sales would account for a quarter of all music sales worldwide by 2010.

Yet these strong figures and the inclusion of advertising-funded services as a source of revenue stream for record companies failed to compensate for an overall decline in CD sales.

More, the IFPI report expressed concern about the continued threat of digital piracy and the devaluation of music content, with the IFPI saying it would sue ISPs that allowed known digital music pirates to operate over their networks.

"The chief winners in the rise of digital music are consumers," said IFPI chairman and CEO John Kennedy in a statement. "Yet the market remains a challenge."

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