Sales of music via the Internet and mobile phones spread like wildfire across the world in 2005 generating sales of US$1.1 billion for record companies - up from US$380 million the previous year according to findings released by the International Federation of the Phonographic Industry.
Music fans downloaded 420 million single tracks from the internet last year - 20 times more than 2 years earlier - while the volume of music licensed by record companies doubled to over 2 million songs. Digital music now accounts for about 6% of record companies' revenues, up from practically zero 2 years ago.
The legitimate digital music business is steadily pushing back on digital piracy. In Europe's two biggest digital markets, UK and Germany, new IFPI research indicates more music fans are legally downloading music than illegally file-swapping.
IFPI Chairman and CEO John Kennedy said: "Already in the UK and Germany - two of the biggest digital markets worldwide - legal buyers from sites like iTunes, Musicload and MSN actually exceed illegal file-swappers. We expect this trend to spread as new and pioneering legal music distribution channels open up to consumers."
The mobile phone became a portable music device in 2005, the first year in which song downloads to mobile phones spread internationally. Mobile music now accounts for approximately 40% of record company digital revenues.
A series of court judgements against unauthorised file-sharing services in late-2005 - in the US, Australia, Taiwan and Korea - has helped transform the market environment for digital music and consumer attitudes to illegal file-sharing. Illegal activity on peer-to-peer networks has stayed static in the last year in comparison to a 26% increase in broadband use.