Music sales slide amid internet cacophony

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Back on the right track? EMI should be so lucky

The music industry suffered its worst year in living memory in 2001, with a fall in global music sales of around 10 per cent despite improving figures in the UK.

The dramatic slump is blamed on fans downloading free music from the internet in the US, while in Asia and Latin America there has been a large increase in CD piracy helped by the increase in "burning", a method of copying CDs.

The International Federation of the Phonographic Industry now estimates that for every one CD bought, one is burned. "The good news is that music is still being listened to and enjoyed. The problem is that more and more, it is not being paid for," said an IFPI spokesperson.

Helen Snell, a music analyst at ABN Amro, had to revise her 2001 forecast down three times last year and now estimates the fall at 10 per cent to around $33.29bn (£23.3bn).

Official figures from the IFPI are due out next month. However, its figures for individual countries indicate the severity of the situation.

While the UK and France are patches of blue in a very stormy sky, both seeing significant increases in sales, the two largest markets, the US and Japan, have experienced enormous falls in sales of CDs.

In the US, which accounts for around 40 per cent of global sales, the number of CDs and records sold fell 9.4 per cent to $13.5bn, according to the IFPI. In Japan, the second-largest market, sales were down 18 per cent to $5.3bn. The piracy issue in Latin America has also led to falling sales in Brazil and Mexico, the seventh and eighth-largest markets respectively. The success of songs such as Shaggy's "It Wasn't Me" and Kylie Minogue's "Can't Get You Out of My Head" led to a strong year for the UK, where sales were up 4.9 per cent to £2bn. France also had a good year with sales up 6.5 per cent to $1.8bn.

Organised gangs are now mass-producing pirated CDs in Asia and Latin America, often using music available illegally from the internet.

In the US the problem rests with an internet-literate population who individually download the tracks. The global economic downturn has also had an effect.

However, some attribute the falls to outdated means of presentation. "The format of albums is fundamentally tired. It no longer feels to consumers like it's value for money," said one analyst.

The global rises and falls have had industry-wide effects. "No one company is really taking the pain," said Ms Snell. "EMI has been in the spotlight more than others but that's because it is a stand-alone company."