The legitimate digital music market

• There are more than 350 legitimate digital music sites worldwide, with leading services offering up to three million tracks for sale or rent.

• In 2005 digital music sales were worth US$1.1 billion in trade revenues and accounted for 5.5% of total music sales.

• Digital music sales split 50:50 globally between online and mobile channels but markets varied widely, with around 70% of US sales being online and more than 90% of sales in Japan through mobile phones.

• The record industry released more than 120,000 albums in 2005, including new titles, re-issues and digital only recordings. The number of albums released is growing in major markets - by 36% in the United States in 2005 for example.

• In the United States, research by Nielsen SoundScan has found that more than one quarter of all the albums released last year were in the digital format.

• Universal Music announced in January 2006 the first step in its plan to make 10,000 deleted European album titles available for download. Other record companies are expected to substantially increase digital releases.

• Since its launch in 2001, Apple has sold more than 58 million iPods, shipping 16.6 million in the first six months of 2006 alone. The iPod has encouraged a raft of new listening habits, while shuffle play and playlisting driving music discovery and encouraging greater listening.

• 3G music phones offer an alternative platform for digital music. IFPI estimates there are around 110 million 3G global listeners.

• Music subscription services are an important delivery channel, accounting for 7% of digital revenues in 2005 - an estimated US$ 113m on a retail basis. Music subscription services now reach around 3.4 million consumers worldwide.

• More than half of those who have begun downloading in the last six months (56%) are using legal services compared to only 41% of those who have been downloading for more than a year (TNS, March 2006)

• In the UK, 11% of downloaders switched from p2p to legal services in 2005 (TNS, March 2006) while in France the percentage of users taking advantage of only legal services rose from 23% to 36% of downloaders in 2005.

• Fears of legal action have been driving waiverers to legal services, with 25% in the US (NPD, June 2006), 42% in the UK (EMR, September 2006) and 35% in the Japan (RIAJ, August 2006) citing fear of legal action as a reason to quit file-sharing. Concern about law suits was lower in Poland (ZPAV, July 2006) where no legal actions have been taken to date.

• Concern about viruses, spyware and security also affected people's views on file-sharing, with 20% of those in the US (NPD, June 2006), 59% of those in the UK (EMR, September 2006), 25% in Poland (ZPAV, July 2006) and 46% in Japan who shunned p2p citing this as a reason for their behaviour (RIAJ, June 2006).

For further information please contact Adrian Strain or Alex Jacob +44 (0) 20 7878 7935, email: press-office@ifpi.org