Music bought online or through mobile phones reached $2 billion in 2006, new research shows. Digital sales, however failed to make up for the decline in CD sales.
At the end of last year, digital sales accounted for about 10 percent of the worldwide music market according to a report released Tuesday by the International Federation of the Phonographic Industry (IFPI).
The recording industry doubled the amount of songs released digitally to four million, and thousands of albums were released across various digital formats and platforms. Classical music also saw a digital dividend and advertising-funded services became a revenue stream for record companies.
Despite the success, the market failed to achieve the holy grail of compensating record companies for the decline in CD sales, the group added.
The chief winners in the rise of digital music are consumers, said IFPI Chairman and CEO John Kennedy. They have effectively been given access to 24-hour music stores with unlimited shelf space.
In addition, piracy remained a threat to the digital music business, and was one of the major reasons why the surging digital market did not make up the shortfall in the physical market.
The IFPI took large scale legal action in 2006 against nearly 10,000 peer-to-peer up-loaders in 18 countries, and plans to step up its campaign to force Internet service providers to help find pirates.