Recorded music sales – top 20 markets summary

Audio content was one of the first content types to feel the effects of the new opportunities for content distribution and consumption that arrived with the internet. This was helped by the early agreement of the MP3 format, which standardised audio compression and coding technologies. Consumers can listen to radio services online, download single tracks or complete albums, stream music over their internet connection, and even create their own audio content. All these ways of consuming music and audio online are also available on mobile devices, as well as PCs and laptops.

The entire music industry (including the recorded music industry, collecting and licensing societies, artists, publishers, music venues and promoters) has been affected in varying ways by the emergence of the internet as a major digital distribution channel. This section focuses in particular on recent international trends in recorded music sales and revenues, as this market is adjacent to broadcast radio and is illustrative of the changing patterns of consumer behaviour that have come about as a result of digital distribution techniques.

Consumers spend more on physical formats when purchasing music
Despite the rise of digital music sales, at a global level consumers still prefer to purchase recorded music in a physical format (CDs, vinyl etc). Only in South Korea does the amount spent on digital sales exceed physical sales, at 55% vs. 45%, due to stronger copyright regulations. But digital sales have continued to rise as recorded music retail sales have fallen over the past few years (2006 – 2010), with losses in physical retail offsetting the gains in the digital sector. Although 67% of people in the UK still prefer to purchase recorded music in a physical format, during 2006 – 2010 the UK saw increased take-up of digital sales (to 25%) with single track purchases and digital albums amounting to 82% of all digital music sales.

According to IFPI, around a quarter of the music business in Asia now comes from digital revenues, set against a backdrop of sharply falling physical sales.

Source: Ofcom calculations based on IFPI data, 'Recording Industry in Numbers' report. Physical sales include CDs, vinyl, cassettes and other physical formats. CD sales ordered via the internet (e.g. Amazon) are reported as physical sales. Digital sales refer to sales via online, mobile channels and via subscriptions. Income from ad-supported services, mono/polyphonic ringtone income and bundled subscriptions are also included.