BPI Blames P2P for Sales Decline, Ignores Streaming, Singles Growth

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Although the British Phonographic Industry (BPI) has repeatedly claimed a rise in total music industry revenues over the last several years, says that rising digital music sales aren't making up for lost physical CD sales even though music fans are no longer forced to buy an entire $20 physical album, just the few tracks they want tracks for 99 cents apiece.

The British Phonographic Industry (BPI) still suffers from the same delusions as its cousin from across the pond – the RIAA – in the belief that illegal downloading is solely to blame for the continued decline in CD sales.

Last week I mentioned how digital music now accounts for 46% of all music purchases in the US, up from 32% in 2008, as well as the RIAA's admission of a "rapidly changing marketplace."

It said the sales figures "only reveal part of the story," and mentioned the "enormous growth in online streaming music and access models" as an indication "about the direction in which the music market is headed."

It was an oddly frank assessment from the RIAA, but it still seemed to claim that P2P was also to blame for the decline in sales.

The BPI delivered the same sort of news, that digital music sales were up, physical sales were down, and the difference between the two in favor of the latter was due to "still-increasing levels of illegal downloading."

It said the market remains "heavily distorted" by illegal file-sharing, and that "meaningful action to tackle illegal downloading remains absolutely critical if we are to stabilize British music sales, let alone return to growth."

It's an odd statement to make considering this past August it claimed total recording music industry revenues for 2009 were up 2.3% from 2008 to £1.12 billion ($1.8b USD). This is on top of last year's declaration by Will Page, Chief Economist for PRS for Music, a UK-based royalty collecting group, that total music industry industry revenues are up 4.7% since 2007.

"UK record companies have responded to tough market conditions by innovating in the digital world and developing new revenue streams from recorded music, beyond their traditional base of CD sales and the encouraging growth in digital a la carte, subscription and streaming services," said BPI Chief Executive Geoff Taylor at the time.

If that's true then why does the BPI claim it is unable to "stabilize" or "grow" music sales?

Part of the problem is that the BPI, and the RIAA for that matter, suffer from the same delusion that digital sales should either match or exceed physical CD sales. It's unlikely to ever happen.

In the past most music fans had the choice of either buying the entire physical album or do without. It was practically impossible to cherry pick single songs. Apple's iTunes changed all that. Now music fans can fork over as little as 99 cents for their favorite song, down from the $19.99 they usually had to fork over in the past.

Additionally, as the RIAA pointed out, in 2010 the music market "saw enormous growth" in online streaming music services like Vevo and Pandora where music fans don't make any music purchases at all. Sure artists and labels get royalty payments, but it's nowhere near the profits on music purchases.

A UK survey from last year even found that streaming music has already caused a majority of young adults (54%) to quit illegally downloading music altogether.

Instead of blaming P2P and even search engines like Google for the decline in music sales the BPI needs to come to terms with a "rapidly changing marketplace."

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