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The BBC's Sumant Bhatia
"Major record companies say the blame lies squarely with websites like Napster"
 real 56k

Thursday, 19 April, 2001, 09:25 GMT 10:25 UK
Online music blamed for falling sales
CD stall in Malaysia
Music sales fall because of the internet and copying
The music industry has blamed free online music and the US economic slowdown for a fall in sales.

In the US, the world's largest market, singles and cassette sales fell by 38% and 46%, which the record companies blamed on free download services applied by Napster, and other online music services.

We also saw the first evidence of the impact of free online music, as well as damage done by unauthorised CD-R copying in some major markets.

IFPI report
Sales in the global market, worth $36.9bn (25.8bn) last year with 3.5bn recordings sold, fell by 1.2% when compared to 1999.

CD album sales, which rose worldwide, were the only bright spot in the report.

The figures are compiled annually by the International Federation of the Phonographic Industry (IFPI) which represents over 1,400 record companies in 70 countries.

US downturn

"The downturn in the USA brought down the overall sales figures. We also saw the first evidence of the impact of free online music, as well as damage done by unauthorised CD-R copying in some major markets", the IFPI said.

The economic downturn was also blamed for the falling US sales after two strong years of releases and sales.

Sales were affected by "US retailers purchasing more conservatively in response to fewer single sales and uncertainty about the US economy," the IFPI said.

The US market accounts for 38% of sales worldwide with Europe, the second largest, accounting for about 21%.

Europe's music lover

Europe was the strongest market, with a 1.3% rise in the number of recordings sold, but some big markets reported copying, using recordable CDs, was having an impact.

HMV store in London
Music sales in the UK were the strongest in Europe
The UK, Europe's biggest market, saw a 6.2% increase in unit sales while falls in France, Germany and Italy were blamed on copying.

There was a mixed picture in Asia, where unit sales were up 1.2% by fell by 4.4% in value.

The higher sales by lower profits was because of the large number of cheap compilation albums released and the economic recession, especially in Japan. In other parts of Asia, falls were blamed on "high rates of piracy".

Latin America and Australiasia both record with falls.

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See also:

26 Feb 01 | Entertainment
Napster blamed for CD singles slump
24 Mar 01 | Business
Song blocking hits Napster usage
24 Feb 01 | Business
Napster clones under threat
09 Feb 01 | Business
Inquiry into CD sales
06 Jun 00 | Entertainment
MP3: A novice's guide
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