Mobile music worth third of $1.1bn digital tunes

Digital music continues to go from strength to strength, fuelled by leagues of new MP3 player converts and mobile music buyers.

According to international music industry body the IFPI, digital music now represents almost six per cent of annual music sales globally, with 420 million tracks sold last year and the record industry raking in $1.1bn from digital music.

Keith Jopling, the IFPI's market research director, said: "We're happy with the progress of the digital market but that doesn't mean that we're there yet – after all, it's still a budding business amounting to about six per cent of the industry's overall revenue. There's a great deal more to come."

The IFPI now believes legal downloading is exceeding piracy in some major markets, including Germany and the UK, and overall piracy has remained stable. While some in the music industry attribute this drop in piracy to a series of lawsuits, other industry watchers believe it's simply a reflection of the increasing availability and comparatively low prices of music at the online song shops.

The digital music industry also looks to be having some success in moving consumers away from less profitable single-track downloads to subscription services, where users effectively pay a montly fee to rent unlimited music. According to the IFPI, there are now 2.8 million users of subscription services, compared to 1.3 million at the start of 2005.

Mobile music also saw mushrooming revenues, with $400m sold during 2005 – around 40 per cent of overall sales. Most of this is attributed to realtones – MP3 snippets of pop songs used as mobile ringtones. Japan remains the home of mobile music, with consumers spending $211m on phone music.

Some eyebrows have been raised about the prices of mobile music downloads, which are often several times more costly than the same track bought through a web-based store.

The IFPI's Jopling said: "We leave pricing to the service providers but we expect prices to vary widely depending on what is being offered. The consumer will decide what is a fair price. We would say that there is a potential for a 'premium' price on mobile due to the convenience and immediacy but let's see if the consumer agrees."