- The Washington Times - Thursday, January 19, 2006

LONDON (AP) — Worldwide sales of music via the Internet and mobile phones reached $1.1 billion last year, almost triple 2004 sales and accounting for 6 percent of global record companies’ revenue, an industry group said yesterday.

The International Federation of the Phonographic Industry (IFPI) said the legitimate music business was gradually gaining ground on digital piracy. It said research showed that in Europe’s two biggest digital markets — Britain and Germany — more music fans are legally downloading music than illegally file swapping.

IFPI Chairman John Kennedy said “2005 was the year that the digital music market took shape,”

The London association said music fans around the globe downloaded 420 million single tracks in 2005, more than double the 156 million downloaded the previous year when record companies’ revenue from downloads was $380 million.

In the United States alone, single-track downloads doubled to 353 million units in 2005, the IFPI reported. Album downloads rose to 16 million and accounted for nearly 3 percent of the total U.S. album market.

In Europe, Britain led the way with 26 million single-track downloads, followed by Germany (21 million) and France (15 million).

Another big success story was sales of mobile-phone ring tones, which account for 40 percent of record companies’ digital revenue, Mr. Kennedy said.

“In the cellular or mobile world, there is a culture of payment” that didn’t exist in the early days of the Internet, said Adam Klein, EMI Group PLC’s executive vice president for strategy.

Mr. Kennedy said a series of court judgments against unauthorized file-sharers in 2005, including Kazaa and Grokster, had helped transform the digital music market.

Mr. Kennedy also warned Internet service providers that the IFPI would consider litigation against them if they did not join the fight against piracy. He said he approached prominent ISPs a year ago about a coordinated response and has received “effectively a zero response.”

A series of lawsuits against piracy by the IFPI have largely targeted individual song swappers for breach of copyright rather than ISPs, which can claim they have no knowledge of piracy occurring on their networks.

Mr. Kennedy warned that a lack of “interoperability” of different portable music devices and download systems was hampering future growth in the digital music market.

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