Worldwide sales of recorded music fell 3 percent last year as consumers bought fewer compact discs and sales of illegal CDs and unauthorized downloads outweighed a shift to online purchases.
Retail sales totaled US$33 billion last year, the International Federation of the Phonographic Industry said yesterday in a statement. Record companies made US$21 billion in trade revenue last year, the group said. Sales rose 1.6 percent in 2004.
Companies such as Vivendi Universal SA's Universal Music Group, Sony BMG Music Entertainment and EMI Group Plc are relying on digital sales to counter declining CD revenue. The record companies' digital sales almost tripled to US$1.1 billion last year. The group blamed the decline in physical sales on piracy, competition from other media and the shift to online buying.
"The theft of music in its various forms continues to exact a heavy price," Mitch Bainwol, chairman of the Recording Industry Association of America, said in a statement. "The piracy problem on college campuses is evolving and presenting new challenges."
In the US, retail music sales were little changed at US$12.3 billion, or US$7 billion wholesale. The US market accounts for more than a third of the world's total.
Legal digital music sales increased as consumers downloaded songs onto portable devices such as Apple Computer Inc's iPod as well as onto their mobile phones.
IFPI said global CD album sales dropped 6.7 percent last year.
"The global music market is fast becoming a mixed economy in the way fans and consumers are buying their music," IFPI chairman John Kennedy said in a statement.
The world's best selling album last year was British rock band Coldplay's X&Y, which sold 8.3 million copies, IFPI said. It was released by Capitol Records, a label owned by EMI Group PLC.
No. 2 The Emancipation of Mimi, which sold 7.7 million albums for Island Def Jam, a unit of Universal Music Group. Carey's album was also the best seller in the US.
At No. 3 was rapper 50 Cent's The Massacre. It sold 7.5 million units for Interscope, another label at Universal, the world's largest record company.
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