Article Summary: 'Still Waiting: Record Labels Long For Digital to Rescue Dwindling Sales' By Katie Allen

The key points of this article (published Thursday 18th Jnuary 2007, The Guardian) are:

• Record companies' digital sales jumped to $2bn (£1bn) in 2006 from $1.1bn a year earlier and continued to take market share (according to the global industry group IFPI,) yet the market is still in decline.
• Mobiles and broadband access may reverse trend.
• Downloads to mobile phones, computers and music players now make up a tenth of global music sales but as sales of physical formats such as CDs continue to fall, digital has not come to the rescue.
• In Japan, where mobile phone downloads are widespread, they have reached a turning point where sales are starting to increase again.
• Digital was within a whisker of offsetting falling CD sales in Britain and the United States.
• The music industry has been battling falling sales since 2000 when the market came up against the rise of illegal downloading sites such as Napster and Grokster.
• The lack of a coordinated response from the record industry compounded the problems and saw sales drop by as much as 7% in both 2002 and 2003. - This is highlighted in an article above from 2003, called "Catch Them If You Can."
• The pace of decline has now slowed but the latest figures still show global trade values down 4% in the first half of 2006 to $8.4bn.
• Universal's chief executive, Doug Morris, recently predicted the world's number-one music company would have its best year ever in 2007. Personally, I think this was probably just a positive and uplifting thing he decided to say at a press conference rather than what he truly believes based on fact. I feel it will take many years (and courtcases against filesharers) before record companies are happy with their sales and profits again.
• Globally, there are now as many downloads to phones as via the web and the mobile subscriptions rose by more than a tenth to 2bn last year.
• Recent research by the UK mobile operator 3 suggested that three-quarters of 16-24 year-olds wanted a track they liked as soon as they heard it.
• Rising access to broadband could also help, with connections up a third globally last year. The music industry touts 2006 as the year when it got wise to the potential of broadband to make digital albums replicate and even outdo the experience of unpacking a fresh CD or vinyl album.
• Warner Music Group doubled online album sales in 2006 by adding lyric sheets, video and photos. Further incentives included priority concert tickets for those who pre-ordered the Red Hot Chili Peppers "bundle".
• The consultancy Entertainment Media Research found in a 2006 survey that 72% of music consumers agreed CDs "are worth more than digital downloads" - a figure unchanged from 2005.
• A large proportion also worry about being able to copy their purchases between devices.
• Digital downloads will not compensate until two things happen; firstly - digital prices decline to below prevailing CD retail prices - at the moment, a digital album is generally more expensive, secondly - the perceived quality of downloads increases.