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Digital Music Growth Wasn't Predictable

Sales of music via the internet and mobile phones proliferated and spread across the world in 2005, generating sales of $1.1 billion for record companies - up from $380 million the previous year - and promising further significant growth in the coming year.

The findings are released in IFPI's Digital Music Report 2006, a comprehensive review of the development of the digital music market internationally.

Music fans downloaded 420 million single tracks from the internet last year - twenty times more than two years earlier - while the volume of music licensed by record companies doubled to over 2 million songs. Digital music now accounts for about 6 percent of record companies' revenues, up from practically zero two years ago.

The mobile phone became a portable music device in 2005, the first year in which song downloads to mobile phones spread internationally. Mobile music now accounts for approximately 40 percent of record company digital revenues. Record companies are seeing sharply increased sales of master ringtones (excerpts of original artist recordings) which account for the bulk of their $400 million-plus mobile music revenues.

IFPI Chairman and CEO John Kennedy said: "Two years ago, few could have predicted the extraordinary developments we are seeing in the digital music business today. And there will be further significant growth in 2006 as the digital music market continues to take shape."

In other words, regardless of the fact that the collective recording industry tried everything within its power to avoid a digital music distribution model, consumers led the record company executives past their myopic perspectives, and forced them to face a new world of opportunities.

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