Digital Albums, Adele Help U.K. Music Industry Contain Slump

January 02, 2012, 11:33 AM EST

By Ragnhild Kjetland

Jan. 2 (Bloomberg) -- Digital music album sales in the U.K. climbed 27 percent last year and singer Adeles 21 set a new industry record, helping curb a slide in demand for CDs.

While digital album sales surged to 26.6 million units, sales of CDs dropped 12.6 percent to 86.2 million last year, the British Recorded Music Industry group BPI said today. Combined sales of digital and physical albums fell 5.6 percent, less than the year earliers 7.5 percent decline.

The music industry, which suffered under the launch of free music-sharing services such as Napster, is taking back some of the market with the help of paid-music services like Apple Inc.s iTunes and Spotify Ltd. Demand for digital albums grew faster than for singles last year, according to BPI.

The most encouraging news is the strong backing consumers are giving to the digital album format, Geoff Taylor, BPI chief executive officer, said in the statement. British music fans under! stand th at the album remains the richest way to connect with an artists work.

Digital music sales now account for 24 percent of all music sales in the U.K., up from 4.7 percent in 2007, BPIs statement shows. CDs make up most of the remainder. Google Inc. recently introduced a music service for its Android phone and tablet computer, striking deals with 1,000 record labels.

Taylor said the U.K. government is taking too long to fight piracy, one of the reasons Britains music market has fallen behind Germanys.

Vinyls Comeback

While other countries take positive steps to protect their creative sector, our government is taking too long to act on piracy, while weakening copyright to the benefit of U.S. tech giants, he said in the statement. Unless decisive action is taken in 2012, investment in music could fall again -- a creative crunch that will destroy jobs and mean the next Adele may not get her chance to shine on the world stage.

Adeles single Someone Like You, released on Beggars Groups XL Recordings label, was the top seller in the U.K. with 1.2 million copies and became the biggest-selling album in a single year, according to BPI. Vivendi SAs Universal Music Group had five singles in the top ten sold last year, including Maroon 5, Rihanna and Jennifer Lopez, and Warner Music, owned by billionaire Len Blavatnik, had two singles in the top ten, from Bruno Mars and Ed Sheeran.

Sales of vinyl LPs rose 44 percent last year to 337,000, the highest level since 2005, according to BPI.

--Editors: Marthe Fourcade, Kenneth Wong.

To contact the reporters on this story: Ragnhild Kjetland in Frankfurt at rkjetland@bloomberg.net

To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net