Music sales fall as demand for CDs drops

LONDON -- Music sales fell last year as a surge in downloaded songs and mobile-phone ringtones failed to make up for declines in compact discs, an industry group said.

Music downloads almost doubled to about $2 billion last year, accounting for about 10 percent of the industry's global sales, the International Federation of the Phonographic Industry said in a statement yesterday. While that's up from 5.5 percent in 2005, it's still not enough to offset the revenue lost due to piracy and declining sales of physical media such as CDs.

The four biggest music companies, Vivendi SA's Universal Music Group, Sony BMG Music Entertainment, EMI Group PLC, and Warner Music Group Corp., are counting on rising sales of downloads. The federation repeated its forecast that downloads will account for at least 25 percent of industry sales by 2010.

Global music sales fell 4 percent in the first half of 2006 as a 10 percent drop in physical sales outweighed gains in downloads, the federation said in October.

Digital music accounted for more than 80 percent of singles sales in 2006, the federation said. Digital sales have "completely" replaced the physical singles market in the United States, Canada, and South Korea, the federation said.