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Last Updated: Wednesday, 15 February 2006, 09:11 GMT
UK music industry enjoys 'boom'
By Ian Youngs
BBC News entertainment reporter

As the Brit Awards honour the best UK artists, fans have more ways than ever to access music and the industry is riding high.

Arctic Monkeys singer Alex Turner
The Arctic Monkeys broke the record for the fastest-selling debut album
Business is "booming", the UK music industry says, as talented new artists are breaking through and the public are lapping them up.

The Arctic Monkeys and James Blunt are leading a new crop of hugely popular UK acts, selling CDs at record-breaking rates.

Excluding compilations, CD sales are higher than ever and albums by British artists have hit a seven-year sales peak, the industry says.

Some 85% of people buy at least one album per month, according to a recent survey of 1,000 internet users by research firm XTN Data.

And legal song downloads, on which record companies and shops alike are staking their futures, more than quadrupled last year.

It's an exciting time to be involved with music, with consumer choice improving all the time
Matt Phillips
British Phonographic Industry
"The UK record industry's continued investment in new music in recent years is paying off," according to Matt Phillips, communications manager for the British Phonographic Industry (BPI).

"There's an enormous range of British talent out there that's breaking through, as reflected in the Brits shortlists.

"Not only that, it's an exciting time to be involved with music, with consumer choice improving all the time."

Ajax Scott, publisher of music business bible Music Week, says the UK industry has been "bearing up pretty well" compared with other countries, where sales have slumped.

"That's a basis from which the industry can look to build the digital business," he says.

The Ordinary Boys at HMV
Record shops are trying to become exciting music destinations
"There's strong growth within downloads and also within the mobile space.

"What makes the situation even more healthy is that there is a lot of exciting new music, of which the Arctic Monkeys are the most obvious example, so there's the talent coming through."

CD prices are coming down all the time - the average album now costs 9.79, according to the BPI.

While this is good news for consumers, it does take some of the shine off the industry's strong sales because companies get less money for the albums they sell.

This is a big issue for high street record stores, which are also being squeezed by supermarkets and online retailers such as Amazon.

UK MUSIC INDUSTRY IN 2005
159 million albums sold
British artists accounted for 49% of non-compilation album sales
Average album price 9.79
21 million physical singles sold
26 million songs downloaded legally
Source: BPI
Supermarkets now account for 28% of all CD sales, the XTN Data research said, and are especially successful with female customers.

"Our challenge now is to evolve our business and respond to all the different changes in the marketplace to ensure that we remain relevant," HMV spokesman Gennaro Castaldo says.

In the download market, more than 26 million songs were legally bought on the net in 2005 - overtaking the number of singles sold over the counter.

One in five people now use a legal music download service, according to XTN Data.

But three quarters of those surveyed said they still preferred to own a CD with a case.

The rise of legal downloads will continue, XTN Data founder Greig Harper says.

"But there are a number of issues - people think downloads are too expensive or they can't find the content they want or they're too difficult to use."

User-friendly

As it becomes easier to share digital files, the industry wants to keep a grip on technology to make sure music is not shared too freely.

Big players like Apple restrict how downloaded songs can be played to ensure fans do not defect to a rival.

But as downloading gains popularity, such tactics risk alienating people who are used to being able to do what they want, within the law, with their music.

Mr Harper says legal download services must become more user-friendly if they are to win over older and less tech-savvy customers.

"This is something the industry really needs to focus on," he says.

Music Week magazine's Ajax Scott says the industry's biggest challenge is work out how to sell fans extra material - like exclusive performances and backstage footage - through devices such as the internet and mobile phones.

"It's about creating content that takes advantage of technology and engages fans in a new way."


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