Statistics revealed by the British Phonographic Institution (BPI) show that consumers continue to be drawn to online retailers and ad-funded services, such as Spotify. The report states that online revenues, including digital tracks and video sales, rose by 51.7% to £154m in 2009. However, a spokesman for the BPI said that this did not necessarily signify that the end was in sight for physical music formats.
"Digital sales now account for a fifth of all music sales, but you can see from strong releases by musician Robbie Williams and Lady Gaga that the CD is still the bedrock of the industry. It is too early to sound the death knell for the CD just yet," the BPI's Adam Liversage told the Guardian.
Earlier this year, industry figures revealed that the singles market enjoyed its best year ever. This was largely down to the success of X Factor finalists and the Christmas chart battle between the reality TV show's winner, Joe McElderry, and American rock band Rage Against the Machine.
Liversage said at the time: "Prior to their closure last year, Woolworths and Zavvi accounted for approximately 17.9% of album sales. Their demise meant that their were fewer places to buy music on the high street." Liversage now says that CD sales faired better than many predicted given last year's high street conditions.
The burgeoning success of online models such as Spotify has also given the music industry pause for thought. The recently launched social music site Mflow, which offers listeners discounted music when they succesfully recommend new tracks to fellow users, is one of the many ways in which consumers are being offered cheaper, alternative ways of purchasing music.
The BPI chairman, Geoff Taylor, was optimistic about the latest statistics, but warned that illegal downloads continued to have a detrimental effect on sales. "It's encouraging to see industry revenues stabilise and even show modest growth in 2009. But let's put it in broader perspective: 2009's modest result follows a five-year drop in annual income, and total industry income has not exceeded £1bn since 2006. The pace of growth of new digital services is encouraging, but the size of the market continues to be constrained by competition from illegal downloads."