Page last updated at 16:15 GMT, Monday, 9 July 2007 17:15 UK

British CD sales drop 10% in 2007

Amy Winehouse
Amy Winehouse's Back To Black is the UK's biggest-seller in 2007

Music fans the UK are continuing to abandon the buying of CDs, with sales down by 10% in the first half of 2007.

Figures compiled by the British Phonographic Industry show that 6.5m fewer albums have been sold this year compared with the same period in 2006.

Consumers failed to make up the shortfall online, with digital album sales increasing by just 2m.

The news comes after HMV announced its profits had halved and high-street record store Fopp shut its 81 outlets.

More than 700 staff lost their jobs as the retailer closed its doors last week, the latest victim of the sharp decline in CD sales.

Digital growth

The digital market continues to grow - with a 50% increase in digital single purchases in the first six months of the year, according to the BPI's figures.

But downloads still only account for 10-20% of the overall music market, and that figure includes formats such as ringtones.

Recorded music is still the building block of new artists' careers
Adam White, Universal Music

The Entertainment Retailers Association, which represents chains like HMV and Virgin alongside independent record shops, said the decline in CD sales was not a cause for panic.

"To be honest these figures are much better than we had feared," said the organisation's co-chairman, Jim Batchelor.

"The release schedule in the first half of this year was very slow with few big acts delivering albums.

"The fact that, in spite of it all, we're still selling around 10m albums a month shows the resilience of demand."

'Building block'

HMV's Oxford Street store
HMV's pre-tax profits dropped from 98m to 48m in the last year
For record companies, the decline in CD sales has sparked a search for new ways to make money from music.

Paul Williams of Music Week magazine said: "Whether that's by getting revenue coming from artists' concerts, by merchandising, or other ways, they're having to tap into the fact that music is now more popular than ever before but record sales themselves are falling."

"If we're still going to be able to invest at the levels we want to, we're going to want to share in those additional revenues," said Adam White of Universal Music.

"But recorded music is still the building block of new artists' careers."

White said that while the industry is experiencing increased pressure, major companies like Universal have to focus on developing unique artists and "imaginative ways to reach the consumer".

He pointed to recent success stories Amy Winehouse, whose Back To Black is the biggest-selling album this year in the UK, and Take That, who sold one million copies of their Beautiful World CD in less than a month.

"To some extent, if you give the people what they want, they will respond," he added.

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