As consumption patterns change, more and more companies are finding new ways to recoup their huge investment. The same situation happen to music industry. Because of the Internet and rampant illegal piracy, the sales of the physical formats are decreasing each year. Variety magazine claimed a 21 percent drop in audio CD sales for the 2007 Christmas season over the previous year. Some analyst even claim that physical formats for multimedia content may be dying on the vine. In order to battle with falling CD sales, music companies seek their fortune in the digital music sales.

The following statistic information is from British Phonographic Industry (BPI), which is the British record industry's trade association. Its membership includes four 'major' record companies (Warner Music Group, EMI, Sony BMG, and Universal Music Group) and hundreds of music companies.

In their 2007 market report, it shows they made 1.4bn pounds from their yearly sales via retailers, on the high street, and online. As their previous projection, the sales of digital format from online stores made up 8.6%. This number seems like no big deal when it compares with the numbers of traditional physical formats. However, when we look at the Top 20 all single sales from 2004 to 2007, we’ll know the difference.


2007 – 85%
2006 – 78% (11.5 mn units)
2005 – 44%
2004 – 4%
More than 200 mn download units
http://www.macworld.co.uk/news/index.cfm?RSS&NewsID=14353


US: 99c
UK: 0.79p
200 mn unit plus 0.79 = 158mn pound

Except for the growth of Digital music sales, music companies also make profits from licensing songs for commercial use, such as TV adverts, films and games, from merchandising and from artists’ tours. As the quote from the BPI’s chief executive Geoff Taylor said, today’s record business is unrecognizable to that of five years ago. The music industry needs to tune into new deals to face its new challenge.