The impact on the music industry of controversial song swapping websites such as Napster became apparent yesterday with figures showing that worldwide sales of recorded music fell last year for the first time.
According to the International Federation of the Phonographic Industry, the market in 2000 was worth $36.9bn, a fall of 1.3% on the previous year. Unit sales of 3.5bn represented a fall of 1.2%.
The biggest decline was in the US where the population is the most internet literate. The biggest dent in the US was the sale of CD singles which had been in gradual decline for the past three years but fell by 39% in 2000. Singles sales globally fell by 14%.
"It's difficult to quantify the effect of free online music but there is little doubt it has had some effect," said a spokeswoman for the IFPI.
"We are not blaming everything on internet piracy but in the US and Canada where internet penetration is very high it has to have had an impact."
The fall, the first since the IFPI began aggregating world wide music sales 10 years ago, underlines the urgency with which the music industry needs to attack the issue of online music piracy. The growth in popularity of websites such as Napster has led to lawsuits for breach of copyright as record companies sought to contain the damage.
Napster is in the process of removing copyrighted material from its site and hopes to reinvent itself as a legitimate business.
The big five music companies including Sony, EMI and Warner Music also recently demonstrated a change in mindset with the launch of their own online distribution joint ventures.
North America was down by 4.8% in unit sales and 1.8% in value. Sales of recorded music have been slowing for the past three years in part because most buyers have now fully replaced their old vinyl collections with CDs. The faltering US economy will also have had an effect.
The MiniDisc appears unlikely to drive the same kind of consumer desire to replace existing collections. The market for that carrier fell by a third during the year, notching up just 700,000 sales and suggesting the format has failed to grip the consumer's imagination.
Recorded music sales in Europe grew by 1.4% in value and 1.3% in volume with the most buoyant markets being Britain and Scandinavia. Britain showed a 3.8% increase in value from unit sales up 6.2%.
France, Germany and Italy all declined, in large part because of an increase in CD copying and piracy.
Industry experts also noted the dearth of new acts on the market last year and the growing influence of music which appeals to younger buyers with lower disposal incomes.
In Japan, another leading market in global terms, the value of sales fell by 4.5% despite a 2.5% rise in volume - attributed to the large number of low-cost compilation albums released during the year.
Sales in other parts of Asia and Latin America fell because of what the IFPI described as the "chronic piracy problem" in the regions.
Global cassette sales fell by 9% in value during the year while vinyl fell by 13.3% despite annecdotal evidence which suggested the format had been undergoing a mini-revival.
CD album sales increased by 2.5% to 2.5bn units.
