Global sales of recorded music down 7% in 2002

London, April 9, 2003

World sales of recorded music fell by 7% in value and by 8% in units in 2002. Mass downloading from unauthorised file sharing on the internet and the massive proliferation of CD burning continues to be a major cause of the fall in CD sales globally, combined with competition from other entertainment sectors and economic uncertainty on consumer spending.

Recorded music sales worldwide fell to US$32 billion in 2002. Compared to 2001, sales of CD albums fell globally by 6%, and there were continued declines in sales of singles (-16%) and cassettes (-36%). Music videos however saw a growth in value of 9%, driven by strong growth in DVD.

The figures were published today by IFPI, the organisation representing the record industry worldwide. IFPI comprises a membership of 1500 record companies, including independents and majors, in 76 countries.

Jay Berman, Chairman and CEO of IFPI said: "This year's figures hold no surprises. Widespread use of illegal sites, made easier with the growth of broadband access in the major markets, is affecting an industry that is also having to compete with increased sales of other entertainment formats such as DVD films and new video game consoles."

"At the same time there are exciting new opportunities opening up to music. The recording industry is pressing ahead with legitimate online music services, and the past few months have seen several new sites, such as dotmusic.com, popfile.de, hmv.co.uk and imusica.com.br, go live. Meanwhile the release schedule for the past year was very strong and although major albums are selling in smaller quantities, we have seen some very strong albums from the likes of Eminem, Shakira, Norah Jones, Avril Lavigne, Nickelback and Red Hot Chili Peppers."

The industry has also stepped up its fight against music piracy worldwide, with intensified legal actions against infringing peer-to-peer services and a global education campaign aimed at online piracy among corporations, government and colleges and universities.

Other positive trends for the industry include the growth in sales of music videos, which saw a 12% rise in units sold. Growth worldwide is attributed to the increase in sales of DVDs overall and DVD players; DVD music videos rose by 58% compared to a 42% decline in VHS. With the release of over 1,300 new titles by record companies in 2002, DVD music videos are expected to become a growing contributor to music sales.

New formats such as DVD Audio and Super Audio CD (SACD) also did well. Music companies have launched new CD titles simultaneously on DVD Audio or SACD. Since 2001, unit sales of both DVD Audio and SACD combined more than trebled, with each format selling over one million each in 2002.

Sales by region

The US saw a third consecutive year of decline, with album sales down 10% in units, mainly due to falling sales from major album releases affected by sales substitution from internet sources.

Japan has continued to suffer from internet piracy and CD burning. An estimated 236 million CD-Rs were burned in 2002, while legitimate CD sales were 229 million. Overall the Japanese market fell 9%, but has the biggest national market share for music video sales, valued at $US 407.5 million.

Several Western European markets performed relatively well in the context of the global decline. France, the world's fourth largest market, continued to defy the global trend with 4% growth in unit sales. This is largely attributable to the continued growth in sales of French repertoire. Norway, Italy and Portugal also saw more or less flat markets.

The German market stands out as worst affected by mass CD burning. Sales fell by 9%, Germany's fifth consecutive year of decline. Spain has now fallen behind other Western European countries in per capita sales, with a fall of 16% in value. Spain has seen a sharp increase in physical CD-R piracy: in 2002 some 24 million pirate units were sold, in other words two out of every five records.

The UK market in 2002 came to the end of its five-year growth run. While the number of albums sold remained stable at 226 million, downward pressure on prices meant the value of album sales fell by 3% and illegal downloading was just one of the factors contributing to the continued decline in single sales. However 2002 was a strong in the UK for domestic artists, who accounted for half of the top 40 selling albums.

Music sales across Asia fell by 10%, largely because of continuing economic difficulties and both physical and internet piracy. The exception was Singapore, which experienced a growth in both regional and international repertoire.

In Latin America, Brazil partly recovered from last year's severe decline (up 4%) due mostly to stock liquidations. Mexico remains the biggest Latin American market and 10th in the world despite a second consecutive year of decline, with sales down 19%. Piracy continues to plague the market with 50% of the population buying pirate music products. The Argentinean market continues to suffer from severe economic and political instability and has fallen steeply by 23%.

Notes to Editors:

For further information please contact:
Adrian Strain or Julie Harari at IFPI on +44 (0)20 7878 7900

The World Sales 2002 report is available on request from IFPI. Hard copies of the report will be available from 16 April 2003.

IFPI comprises a membership of 1500 record companies, including independents and majors, in 76 countries.