Digital music sales triple to US$1.1bln in 2005

LONDON (Reuters) - Worldwide digital music sales surged threefold to US$1.1 billion in 2005, the industry trade body said on Thursday, as consumers flocked to buy music for their computers, iPods and mobile phones.

Revenues are split roughly 60-40 between online music services like Apple's iTunes Music Store and mobile phone revenues such as "ringtunes" that contain excerpts of songs, the International Federation of the Phonographic Industry said.

Digital music now makes up about 6 percent of the industry's total sales, up from virtually nil two years ago. However, overall revenues are still in decline, falling from US$13.4 billion to US$13.2 billion in the first half of the year.

The music industry, whose sales have plunged since the advent of file-sharing networks like Kazaa, saw the tide begin to turn in 2005 with a series of courtroom victories in the United States, Australia and other countries.

In 2006, industry watchers predict that many file-sharing networks will attempt to become legitimate by installing filtering software that screens out copyrighted music.

As part of its carrot-and-stick approach, the industry has also filed lawsuits against nearly 20,000 file-sharers, while expanding the number of online music services to 335, from about 50 two years ago.

Subscription services like RealNetworks' Rhapsody, Napster and Yahoo Music, which offer "all you can eat" music for a monthly fee, grew from 1.5 million to 2.8 million subscribers.