The Legitimate Digital Music Market Takes Off

4th April 2006

Tracks available

• There are at least two million tracks or 165,000 albums now available on some online music services.
  
  
• There are at least 500,000 tracks on any one service, across Europe.

Sites

• There are more than 190 online music sites in Europe and over 325 globally. The cross-industry www.pro-music.org site now features a comprehensive worldwide directory of legitimate online services.
  
  
• Legal download services are present in 23 countries in Europe.
  
  
• Some 18 services in Europe have a presence in two or more markets.
  
  
• As well as the big pan-European players a variety of specialised services are also appearing, for example independent label content only.
  
  
• The expansion of services in Europe is being driven by a mix of major players and independent services. Loudeye - owners of OD2 - power a variety of services in over 20 countries and iTunes has a presence in 17 European markets.
  
  
• iTunes sold its one billionth song on February 23rd 2006

Legal music downloading catches up

The number of people using legal online music services is now on a par with those using p2p services in the US and UK, while legal users are rapidly catching up in other markets.

• In the US, the latest survey by Pew internet and American Life (released November 2nd, 2005) found that equal proportions of teenagers - previously the core constituent p2p users - now use legal services as those using p2p - about 30 per cent of teenagers in both cases. This suggests major progress for legal services, since the previous teen user ratio measured by Pew was 3:1 in favour of p2p use.
  
  
• In the UK, 10 per cent of the population frequently use p2p vs. seven per cent who use legal services (Jupiter, Nov 04)

Meanwhile outside the US and UK, P2P use still outweighs legal - but with a steady catching-up of legal use:

• Europe: 51 per cent digital music users use P2P vs. 29 per cent who use legal services (Indicare, Feb 05)
  
  
• Germany: 85 per cent downloaders use P2P vs. 51 per cent who use legal services (GfK, Jan 05)
  
  
• Canada: 22 per cent downloaders use P2P vs. 12 per cent who use legal services (Pollara, Jun 05).

However actual download volumes from legal sources are still very low compared with unauthorised sources. For example in Canada, research has revealed that for every one legal download there are some 14 illegal downloads.

Sales

• Single track downloads in the US, the UK, Germany and France rose to 180 million in the first half of 2005 compared to 157 million for the whole of 2004. This is more than three times the 57 million downloads of the first half of 2004.
  
  
• In the US, to end October 2005, year to date digital album sales reached 10.9 million, up 226 per cent on 2004. Single track downloads have sold 251.3 million, up 160.3 per cent. Digital albums represent 2.6 per cent of total album sales (CD, MC, digital and other) compared to 0.7 per cent a year ago.
  
  
• In UK single track downloads in the nine months of 2005 were at 16.9 million, up from 2.7 million in the same period of 2004  (BPI)
  
  
• Global subscriptions to legal online services reached 2.4 million by September 2005, up from 1.5 million subscriptions estimated in IFPI's Digital Music Report in January.