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But the ability to offer music tracks online over the Internet rendered this business model obsolete. The figures show that in recent years the album market turned back into a single market. While in 2008 global CD sales had already declined below the level of 1993, single-sales, due to exploding digital downloads, prospered while sales of digital albums grew slowly. Since 2004, when digital sales were reported for the first time, single sales more than quadrupled (!) to 1.5 billion units, whereas the amount of digital albums sold in the same year only comes to 113 million units. If we now compare all long-play formats (excluding music videos) with the single formats, we can see that as many long-play products (1.51 billion units) were sold as single products (1.49 billion units).

Since CD sales in the U.S., Britain, and Germany have been falling since 2000 and 1999, respectively it seems obvious to explain this decrease by pointing to the appearance of NAPSTER, which already attracted millions of users every day in the fall of 1999. However, the figures also showed that the Japanese market, the second most important market in the world, already suffered an 8.2% loss of CD sales between 1997 and 1999, but that it was up by 7.9% in 2000. In Japan sales were in decline even before the onset of NAPSTER, which industry representatives would probably explain by pointing to the emerging practice of ripping and burning CDs. For the French market no such simple explanations work. In 2001, an historic high of CD sales was measured before the recession startet in 2002, when the hype around NAPSTER was already history. However, since it is not very realictic to assume that French music consumers had not been aware of how to obtain music for free over the net until 2002, it can safely be assumed that they used NAPSTER as avidly as did consumers in other countries. Similarily, it cannot be explained why the UK-market – after a minus of 17.7% from 2000 to 2001 –was able to hold its sales level in subsequent years, despite the emergence of new P2P-filesharing systems. From 2003 to 2004 one could even observe an increase of 4.4%. In the UK, the first strong sales slumps took place only in 2007. Thus, there are empirical anomalies that put the “filesharing-thesis” into question.


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We can clearly see that sales of non-CD items -- DVDs excluded -- haveeither barely held steady or have plunged dramatically since 1990. Netsales from these items plunged from nearly four billion dollars in 1990 to slightly over one-and-three-quarters billion dollars in 1998, the year that Napster went online. That's an average of $250 million per year in declining sales before P2P even got off the ground. Thus, the losses of $530 million in non-CD sales over two years (2000 to 2002) should come as no surprise.