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Tuesday, 12 March, 2002, 15:08 GMT
Trouble ahead for music industry
CD sales in the US dropped by 10% in 2001
CD sales in the US dropped by 10% in 2001
The UK music industry has been told it must rethink the way it tackles digital music or face long-term decline.

If record companies do not make their own digital music services more attractive to fans, they could continue to lose out to music piracy over the internet, a report has said.

Record companies have tried to set up their own download services
Record companies have tried to set up their own download services
Labels could develop services through digital TVs and mobile phones and follow the examples set by ringtones and computer software, the report, from the Department of Trade and Industry (DTI), has said.

Music is the UK's third biggest export earner, contributing more than 4bn per year to the economy.

But a global slump in CD sales has been blamed on illegal internet downloads and CD-copying.

"With world-wide sales of recorded music falling... it's time for an overhaul of the 100-year old business model," a statement from the report's authors said.

The report warned that more and more tech-savvy fans could turn to illegal downloads if the music industry did not come up with a viable alternative.

Major record companies have launched two pay download services in the United States, MusicNet and Pressplay - but they have yet to take off.

Added incentive

The music industry must be more imaginative, the report said.

A range of extra content, like games, pictures and animations could be added so fans had an added incentive to buy the official download.

Musicians could also release new songs in a digital format throughout the year, rather than saving all their new material to put on an album.

The music industry could also learn a lesson from the success of mobile phone ringtones in the UK, the report said.

"Digital music services should be as simple and convenient to use as buying a new ringtone," it said.


The UK is in a good position to take the lead in forging new services - but risks getting left behind if it just follows the Unites States, the report said.

But that also depended on how many people had access to high-speed, broadband connections.

"If broadband issues in the UK are not resolved, then British-based companies will not be able to compete," it said.

Despite the publicity surrounding music downloads, viable services were seen to be as far off today as they did two years ago.

Called Monetising Anarchy, the report was drawn up by the DTI and the University of Surrey.

See also:

26 Feb 02 | New Media
Piracy blamed for CD sales slump
08 Feb 02 | New Media
Music industry's digital plans 'fail'
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