UK album sales peak but industry profits dip

LONDON, UK (BPI) - Album sales in the UK have reached an all time high - but music industry profits are down.

CD price wars and a continuing massive slump in singles sales have left record sales values down 4.1% in the year to June, according to new data from the British Phonographic Industry.

During that period the album market swelled to 228.3 million units, the largest ever recorded and nearly 3% up on the previous year.

The biggest sellers of the past few months have included Justin Timberlake's Justified, Elephant by White Stripes and the Now! 54 compilation. The album market has now remained above 200 million since 1999.

The BPI said: "It is clear that cheap retail prices on offer to the consumer combined with strong new release titles are sustaining the UK album market at a high level."
But while sales increased from June 2002 to June 2003, profits for albums actually dipped by 2%. It is due to many music retailers offering huge discounts. The average price for an album is now �9.79, the cheapest it has ever been in the UK.

The poor state of the singles industry was demonstrated by the 26% drop in both volume and value terms in the 12-month period. Singles were worth just �75.1 million - just 6.5% of the �1,153 million total value of the music industry during that time.

Initiatives are already underway to virtually bypass the singles market by paying for individual tracks as downloads at a fraction of the �4 price tag of most singles.
A definitive weekly download chart is expected to be launched later this year. And in 2004 it is expected to be incorporated in the singles chart.

There could be further gloom for the music industry by the end of this year if trends for the first two quarters of this year continue. The BPI said the total UK music market for the first six months of 2003 is down 7% in sales values, compared to 2002.