Nielsen SoundScan Figures Confirm Canada's Weak Digital Music Market and the Sharp, Ongoing Decline in Overall Recorded Music Sales



    TORONTO, Jan. 4 /CNW/ - Music sales figures for 2007 released by Nielsen
SoundScan Canada confirm the challenging state of Canada's recorded music
industry, the Canadian Recording Industry Association (CRIA) reported today.
    According to Nielsen SoundScan, 1.98 million digital albums were sold in
Canada last year, which amounts to just 4.5 percent of the 44.4 million total
album sold. The figures show that modest digital sales in Canada fall far
short of making up for the sharp, long-term decline in sales of physical
formats.
    In contrast with Canada's relatively undeveloped digital market, where
digital downloads, subscription services and mobile music comprise just 12
percent of total sales, in the U.S. these channels comprise 29 percent of
sales (source: IFPI, June 30, 2007). Because of weak copyright rules that
inhibit investment in legitimate digital services and their entry into the
market, digital sales in Canada are failing to replace declining CD and music
DVD sales at the same rate they do in markets like the U.S., Japan and the
U.K.
    Canada's digital music market continues to significantly lag behind these
other markets, which long ago updated copyright laws for the digital era and
in keeping with their - and Canada's - commitments under international
treaties.
    Nielsen also found that unit album sales fell 9.5 percent from 2006 to
2007, mirroring sharp declines reported by CRIA members, which account for the
vast majority of recorded music sold in Canada.
    "Nielsen's figures validate an unfortunate truth - that unabated illegal
Internet music file-sharing continues to harm artists and the organizations
and people behind them," said CRIA President Graham Henderson. "They also
underscore the need for updated copyright laws, mirroring those of our major
trading partners, to help bring unauthorized downloading under control in
Canada."
    All of the Nielsen figures represent unit sales as opposed to dollar
sales, which have declined at an even higher rate.
    Net wholesale sales figures compiled by CRIA corroborate the dramatic
decline reported by the over-the-counter Neilson figures. For the 11 months
ended November 2007, net wholesale shipments of CDs, music DVDs, and other
"physical" recorded music formats dropped 16 percent to 37.9 million units
from 45.1 million units in the year-earlier period, while the related net
wholesale value dropped 20 percent to $382.4 million from $476.3 million.
(CRIA figures for the entire calendar year will be available later this
month). The figures vary with those of Nielsen in part because they do not
represent the entire year, but also because the methods of calculation differ
and, to a lesser degree, because they do not include digital sales.
    "While unit figures help to indicate the direction of trends, revenues
are more important because they represent the funds available to artists and
to music labels to fund the development of talent, recording, marketing and
other activities that support music in Canada," Henderson said. "In this
market, it's harder to develop, market and sell artists and their music than
ever before, so per-unit costs such as marketing continue to skyrocket,
leaving less on the table for everyone."
    Based on research conducted in 2006, Pollara conservatively estimates
that there are more than 1.3 billion unauthorized downloads in this country
per year, far overshadowing the estimated 20 million legitimate downloads in
2006 - a ratio of 65 unauthorized downloads for every legitimate download - as
reported by survey respondents. This finding indicates that the readiness of
many Canadians to choose unauthorized file-sharing sites over legitimate
digital services is fundamentally unchanged since the OECD in 2005 identified
Canada as having the highest per capita incidence of online file-swapping in
the world.
    "Unhindered by modern laws that signal what is acceptable on the
Internet, Canada has embraced a 'free for the taking' Internet culture that
ultimately undermines innovation and creativity in music while continuing to
draw unwanted negative attention from our trading partners," Henderson said.

    About the Canadian Recording Industry Association

    The Canadian Recording Industry Association (CRIA) promotes the interests
of Canadian record companies.





For further information:

For further information: Don Hogarth, (416) 565-8920, don@hogarthpr.com

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CANADIAN RECORDING INDUSTRY ASSOCIATION

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