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Since 1st March, 1999
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Singing stars fail to keep cash registers ringing

London, April 7 (Reuters): Global music sales fell 7.6 per cent in 2003 to $32 billion, the steepest decline since the advent of the compact disc, the trade body representing the world’s largest music companies said today.

The International Federation of the Phonographic Industry blamed the slump in retail music sales — now in its fourth consecutive year — on rampant piracy, poor economic conditions and competition from video games and DVDs.

However, a strong second-half recovery in the US, Britain and Australia, boosted by top-selling acts such as Justin Timberlake, Beyonce and rapper 50 Cent, has raised hopes that the worst is behind the beleaguered industry.

“I think the long-term secular decline has just about come to a conclusion. Is it over' I don’t know the answer to that yet,” said federation chairman Jay Berman. He predicted 2004 music sales in unit terms would decline “by about 4 per cent”.

Continental Europe — specifically Germany, France and the Nordic countries — plus Japan continued to experience steep sales declines. Berman said there was no recovery in sight in those markets.

The federation represents hundreds of the world’s independent and major music labels including Warner Music, Sony Music, Universal Music, EMI and BMG.

Noting that first-half 2003 sales were down nearly 11 per cent, analysts regarded the full-year figure as positive news but said evidence of a full-fledged recovery is flimsy. The industry is making strides by cutting costs and staff but needs to invest more in new technologies such as Internet music stores and mobile phone ring tones to develop new revenue streams, analysts said.

“Anything that will pull the industry out of the mire and turn things around they will have to invest in,” said Simon Dyson, an analyst with London-based consultancy Informa Media.

Global compact disc sales — the most often cited figure in discussing the health of the industry — fell 9.1 per cent in value in 2003, the federation said. Unit sales fell by 6.5 per cent.

Total sales of singles, including cassettes and vinyl, which have dipped significantly since the Internet file-sharing and CD-burning craze began in the late 1990s, fell 18.7 per cent in value terms between 2002 and 2003.

In the German market, sales fell for the sixth consecutive year, this time by 19 per cent. The trade body recently conducted a study that found the number of CDs burned by German consumers jumped to 325 million in 2003 from 260 million in 2002.

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