Record Sales Hit A 25-Year Low

This week record sales fell below 5m for the first time in 25 years. Figures released by the trade body BPI have shown that annual sales fell by 3.5% in 2009 making this the fifth consecutive year for diminishing sales.

Although the yearly fall was met with a 56% increase in downloads through legal sources such as iTunes, but downloads are generally less profitable than the physical product.

The culprit for the downturn in sales is likely to be those who illegally download music via P2P networks and through sites like The Pirate Bay.

"ISP's clearly have a key role here as do fans who need to change their outlook from simply being users to guardians of the music they love. If not, they may find that the choice and diversity they currently enjoy may begin to dimish in future as record labels become more cautious about the type of acts and music they promote," said HMV spokesman Gennaro Castaldo.

“I don’t think illegal downloading is affecting my business specifically, I think it has affected the record industry considerably as it has stopped a lot of artists, particularly big labels making money, where they have had to go down the road of budget and go down the route of mass market,“ said Philip Harding owner of Black Cat records.

"Some labels are not investing in pushing forward and are stuck in their ways so they have collapsed,” said Dan McHugh marketing executive of Fat Cat Records.

Though the effects of online piracy are not always negative, people who download music illegally on average spend £77 pounds a year compared £33 for those who get their music from a legal source. So the Digital Economy Act could punish those who contribute the most to the industry?

Mike Offen from Really Good Records: “Coming from the perspective of a second-hand retailer, I believe that downloads are good for research and reference, but I perceive from the new outlets that downloading is having quite an effect on new sales, but also a preamble to purchasing the original artefact.”