The music industry has blamed free online music and the US economic slowdown for a fall in sales.
In the US, the world’s largest market, singles and cassette sales fell by 38% and 46%, which the record companies blamed on free download services applied by Napstar, MP3.com and other online music services.
We also saw the first evidence of the impact of free online music, as well as damage done by unauthorised CD-R copying in some major markets.
IFPI report Sales in the global market, worth $36.9bn ( £25.8bn) last year with 3.5bn recordings sold, fell by 1.2% when compared to 1999.
CD album sales, which rose worldwide, were the only bright spot in the report.
The figures are compiled annually by the International Federation of the Phonographic Industry (IFPI) which represents over 1,400 record companies in 70 countries.
“The downturn in the USA brought down the overall sales figures. We also saw the first evidence of the impact of free online music, as well as damage done by unauthorised CD-R copying in some major markets”, the IFPI said.
The economic downturn was also blamed for the falling US sales after two strong years of releases and sales.
Sales were affected by “US retailers purchasing more conservatively in response to fewer single sales and uncertainty about the US economy,” the IFPI said.
The US market accounts for 38% of sales worldwide with Europe, the second largest, accounting for about 21%.
Europe was the strongest market, with a 1.3% rise in the number of recordings sold, but some big markets reported copying, using recordable CDs, was having an impact.
The UK, Europe’s biggest market, saw a 6.2% increase in unit sales while falls in France, Germany and Italy were blamed on copying.
There was a mixed picture in Asia, where unit sales were up 1.2% by fell by 4.4% in value.
The higher sales by lower profits was because of the large number of cheap compilation albums released and the economic recession, especially in Japan. In other parts of Asia, falls were blamed on “high rates of piracy”.
Latin America and Australiasia both record with falls.