Note the spin – Reuters is neutral?
- Global music sales spiraled 9.2 percent lower in the first half of 2002 but the battered music industry is holding out for a second-half revival led by Elvis, Coldplay and Shakira, a leading industry body said on Thursday.
Rampant piracy, weak economies and competition from other entertainment such as video games ate into sales, forcing world CD sales seven percent lower in the first six months of 2002, the International Federation of the Phonographic Industry said.
The music industry has been in steep decline as extensive CD piracy, often from pirate Web Sites, and the economic slowdown hammers sales. Among the hardest hit have been the five major music companies which account for 75 percent of sales — Universal Music, Warner Music, Sony, BMG and EMI.
The IFPI said a strong release schedule in the second half of the year including albums from EMI’s Craig David, Coldplay and the Rolling Stones, and Universal’s Shaggy and Shania Twain were expected to lift sales in the second half.
Global music sales fell five percent to $33.7 billion in 2001. The IFPI said in its interim report that global music sales fell 11.2 percent in unit terms in the first half of 2002 while the more closely watched value figure fell 9.2 percent.
“The figures are disappointing but not unexpected. The industry is in transition, with widespread CD-R copying and Internet downloading continuing to affect sales,” IFPI Chairman and CEO Jay Berman said in a statement. Shares in EMI, the only one of the five major music groups not owned by a bigger media conglomerate, were trading 1.85 percent down at 159 pence in London at 1110 GMT. The stock was off earlier lows of 149-1/2 pence, with investors saying the figures proved slightly better than some had expected.
Singles and cassettes continued their long-term decline in the first six months of this year, sliding 17 percent and 31 percent respectively.
The world’s largest markets, the United States and Japan which account for more than 50 percent of world sales, fell 6.8 percent and 14.2 percent respectively in value terms. Western Europe fell 7.5 percent and Asia tumbled 15.6 percent.
The industry body noted the first half traditionally only accounts for some 40 percent of annual figures and a number of highly anticipated releases were scheduled for the second half.
There is less consensus on the cause of the music industry’s downturn than there is on global warming: it’s all in the interpretation. Some studies suggest file sharing is actually HELPING the music indistry (see Dan Bricklin’s analysis here). The interesting thing here is that Reuters buys the industry party line without question. The word “pirate” (or “piracy”) is used three times in the story. And this from a news service that so prides itself on “neutrality” that it won’t call Osama bin Laden a “terrorist.”