Digital music sales triple to $1.1bn in 2005

Cash accrued from 420m song downloads

Record companies made more than $1.1bn on legal digital music downloads last year - three times what they received in 2004. At that time they made $380m, the International Federation of the Phonographic Industry (IFPI) said today.

Crucially, in some markets, including the UK and Germany, more listeners are downloading legal files than illicit ones, the organisation claimed, citing research commissioned from market watcher Jupiter.

The researcher found that, while six per cent of internet users in those two countries regularly download songs from legal sources, only five per cent regularly source music from illegal file-shares.

Of course, the latter constituency is likely to be higher than five per cent, given the unwillingness of some P2P users to admit they are engaged in an activity they know to be illegal or, at the very least, immoral. And in any case, the respective percentages give no indication as to the volume of legal and illegal downloads. There are no indications elsewhere that P2P download activity, particularly in Europe, has been significantly reduced by the growing availability of legal music download sources.

IFPI said some 420m individual songs were downloaded via the internet legally in 2005 - more than 20 times the quantity downloaded in 2003 and enough to account to six per cent of record labels' combined sales. Worldwide, there are now more than 335 legal download sites - up from 50 two years ago, the organisation said.

Since those 420m songs net the record companies, approximately, 66 cents a track, that's a revenue contribution of just $277.2m - a long way from the $1.1bn revenue gain from digital music, the labels claim. Even if the IFPI is assuming the full price goes to the label, that's still only the best part of $420m.

IFPI said mobile-phone music services accounted for 40 per cent of record companies' digital revenues, most of it coming from ringtones that comprise snippets of original artist recordings rather than track downloads. Mobile music revenues totalled $400m in 2005. ®