The Ballad of Bootleggin' Music
As music sales decline, labels get nervous.
The big labels are expectedly nervous, as they navigate an environment where total CD sales fell 11% in 2006, and continue to plunge at record rates. British music giant EMI announced in January plans to cut nearly 2000 jobs, while earlier this month Warner Music Group (WMG) reported a 20% drop in shares.
The grim statistics are, however, only part of the story. Digital sales for WMG shot up 41.9% from a year ago to $132 million. Overall, digital music sales tripled in 2005, doubled in 2006, and increased 40% in 2007, according to The International Federation of the Phonographic Industry (IFPI). Yet in spite of $2.9 billion in revenue worldwide, experts insist that it will still take years before digital sales make up loses incurred by the demise of the CD.
At the center of the storm remains one powerful force: internet piracy. In 2007, tens of billions of illegal files were swapped, according to IFPI's latest report. The ratio of unlicensed tracks downloaded to legal tracks sold is about 20 to 1.
The enormity of the situation has alerted decision makers from all levels of government, and across international borders. It's also piqued the interest of Hoofy and Boo, who chime in with a very special report on the future of the music biz...
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