Last Monday, the British Phonographic Institute, the trade association for the music biz, announced 2002's sales. While the overall market for albums declined by 0.1%, sales of CDs by volume rose 1.4%.
According to Frukt, a music consultancy, these are surprisingly good numbers. The total market of £1.18bn is the second highest ever - not bad for an economy in the midst of a downturn.
But in recent years the announcement of these numbers, especially in the light of an 11% decline in singles sales, brings the spotlight back to the question of file sharing on the internet and the effect it will have on the music industry.
Coincidentally, on that same day I was travelling to Switzerland. Like many travellers, I idled through Heathrow's shops looking for some music to accompany my snowboarding trip. I was looking for "2-Many-DJs" and album by Belgian DJs Soulwax . The album mixed incongruous and desperately unfashionable sounds to create a genre known as bootleg.
Soulwax had created mayhem across Europe's dancefloors in 2002 and succeeded into turning this popularity into album success. They became the ambassadors of "bootleg" and 2-Many-DJs was tipped by the New York Times as the best record of last year.
But the store in question didn't carry the album. Soulwax had run into copyright problems with the album. Their mixing and sampling had brought them face-to-face with several lawyers. The CD was taken off the shelves shortly after its release last year. After some more work behind the scenes, Soulwax were allowed to reissue it. It was due in the shops on the day of my journey but the Heathrow outpost hadn't yet received it.
Fortunately, my friendly record salesman volunteered a suggestion: "Just download it from the Net. It's much better anyway. You'll find four or five different versions of it." And there we have it. The footsoldier at the very frontline of the business where the value exchange between the consumer and the music industry occurs, had defected.
His defection - and the inability of the record industry to supply me with the product I wanted, when I wanted - highlights the three main problems facing the business faces.
First, copyright constrains creativity: The Soulwax album originally crammed excerpts from 187 different tunes into little more than an hour of playing time. It took the label several hundred phone calls and emails to get clearance for two-thirds of these: an enormous economic cost.
And for what? Bootleg hardly cannibalises record sales of the music sampled. If anything it adds a new veneer of cool to Michael Jackson or Britney Spears and is more likely to encourage marginal sales of their albums to new audiences.
As new genres emerge through the creativity of individual artists, the existing framework of copyright will start to restrict new forms of expression. These will demand new frameworks for intellectual property, like the Creative Commons.
Second, physical distribution constrains consumers: by demanding that music is distributed on a physical CD, the music industry makes consumers hostages to the inventory management of the retailer and the retailer dependent on the margins the labels let them get away with. So while sales of physical CDs grow slightly, sales of DVDs exploded.
DVDs are attractive for consumers because they offer us something we can't get elsewhere and because during the early years of market adoptions, a back catalogue of films is a must-have accompaniment to a new DVD player. For retailers, it makes more sense to push DVDs in their stores because the margins offered are two or three times higher than those on CDs.
Thirdly, and most importantly, the culture revolution is in full-swing. The 65m people who regularly use file-sharing have done so of their own volition without duress or cajoling. And those file-sharers include the music lovers staffing record stores. Like a general unable to control an army in revolt, the heads of the music business will find it hard to control the sentiments of the people selling their products.
The defector I met is an important indication of the cultural shift. It means that file-sharing is becoming as much a part of music as CDs are.
Now it is time for those who run the music business, not just those who actually sell the records, to accept it.
Azeem Azhar is at azeem.azhar.co.uk
