The market for music downloads from legal online services such as Napster tripled in value during the first half of this year. It now accounts for 6 percent of total record industry sales, a sign of how fast online delivery of music is catching on.
The value of digital music downloads to computers and mobile phones rose to £449m in the first half of this year, up from £125m during the same time last year, according to the IFPI (International Federation of the Phonographic Industry).
In fact, the digital music market has already overtaken the global singles market in terms of value, the London-based industry group said.
The group said booming demand for music downloads nearly offset a decline in sales of recorded music on formats such as CD and DVD, which fell 6.3 percent in retail value to £7.04bn in the first six months of the year.
Music industry recording sales dropped 1.9 percent to £7.5bn overall in the first half of the year, compared to £7.6bn in the same period of 2004.
Lower retail prices for CDs in some key markets, a small decline in DVD music video sales and the continued impact of illegal downloading and CD burning caused the year-on-year decline, the IFPI said.
"The figures show online and mobile sales making a significant impact on the world music market for the first time," the IFPI said.
The surge in digital music sales is being driven by increased use of broadband internet services, portable digital music players and 3G (third generation) mobile phones, IFPI said.
Digital music is spreading fastest in the world's top five markets, the US, the UK, Japan, Germany and France.
In Europe, which the IFPI highlighted as a problem area for illegal digital-music swapping, downloads did make some gains. Single track downloads increased tenfold to 10 million units in the UK during the first half of the year, and in Germany, to 8.5 million from one million units a year ago.
The IFPI also highlighted recent victories in its war against internet piracy, saying recent court victories against unauthorised file-sharing services such as Kazaa have begun to help shift the balance in favour of legitimate businesses.
In September, a judge in Australia ruled that the operators of the Kazaa file-sharing network authorised the widespread violation of copyright laws. The judge ordered that significant changes be made to how the Kazaa service works, but stopped short of ordering the peer-to-peer file-sharing service to be shut down.