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UK’s Digital Music Boost Slowed In 2010

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UK music sales are still growing – but a slowdown in online sales has reduced that industry growth to its slowest since digital’s boost first started five years ago, our analysis of new data shows…

Digital began resuscitating singles unit sales in 2006 and is helping slow the decline in album unit sales – meaning consecutive years of overall volume growth, according to figures from Official Charts Company, released by the British Phonographic Industry…

When you combine format sales, as I have done, you see that total UK music sales by volume increased marginally through 2010, from 281.6 million units to 281.7 million…

But a slowdown in digital unit sales growth meant this total industry growth was the slowest seen in the last five years, during which total purchases have rocketed on digital sales; they now make up nearly a fifth of the total.

Part of the reason may be because 2009 was a 53-week year. But, even then, the slowdown is evident.

Of course, unit volume is not the same as sale income – bits sell cheaper than atoms. But total income is growing, too

BPI figures for the last year available, 2009, showed how UK recorded music income grew 1.4 percent to £928.8 ($1446.69) million on “a strong fourth quarter and increased digital income stream”. If these new volume figures are to be believed, however, 2010 income growth is likely to be reduced or negative when the BPI releases figures in February.

It all places the industry in a familiar contradictionhailing the success effect of digital, but lamenting what it argues is the continuing hurt of illegal downloading…

“Despite unprecedented demand for music, and strong innovation offering consumers new ways to access music online, legal downloads are unable to offset the decline in CD sales because they are dwarfed by illegal competition,” says BPI CEO Geoff Taylor.

The British industry thinks 1.2 billion files were obtained illegally in 2010 – that’s worth £984,000 ($1532.67) if sold legally, and compared with 370 million legal digital sales.