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DIGITAL MUSIC REPORT 2009 New Business Models for a Changing Environment. IFPI DIGITAL MUSIC REPORT 2009 Contents p3 n Introduction: Music has embraced the future with new business models – Will governments secure a future for digital content? p4 n Section 1: Shaping a new era in digital music – Digital music: key facts and figures p8 n Section 2: New business models for a changing environment – The shift to ‘music access’ – More choice in music downloads – Social networks and ad-supported services deliver - New frontiers: brands, games and merchandising – Public performance: getting fair value for music – Digital music goes global – three countries in focus p18 n Section 3: The core mission – investing in talent – Cutting through the digital noise – Adding value to artists – Broadening services – Marketing an album in the digital world – A team sharing the same vision: The manager’s view p22 n Section 4: Monetising music in an era of free – the role of ISPs and governments – A future for local music and film? France and Spain in focus – From concept to reality: governments start to move on ISP cooperation p26 n Section 5: Education – the campaign for hearts and minds – Young People, Music and the Internet – Pro-music.org – National campaigns p28 n Section 6: Creative voices speak out – When did intellectual property become free? – music managers speak out – Commerce in the era of “free” – a common challenge for creative industries p30 n 2 Section 7: Pre-release piracy: industry steps-up action INTRODUCTION Music has embraced the future with new business models – will governments secure a future for digital content? By John Kennedy, chairman and chief executive, IFPI. The recorded music industry is reinventing itself and its business models. Our world in 2009 looks fundamentally different from how it looked five years ago. Record companies have changed their whole approach to doing business, reshaped their operations and responded to the dramatic transformation in the way music is distributed and consumed. The music business, like others, goes into 2009 under the uncertain cloud of the global economic downturn. However, we are no stranger to the need to reform, restructure and reinvent. Record companies began this process many years ago. They are, I believe, as a result, better placed than many other sectors to manage through more difficult times. There are some very positive stories in this report about innovation and change inside today’s music business. First, record companies are building an economic future based not just on selling music but on “monetising” consumer access to it. Nokia’s Comes With Music service, launched in October 2008, embodies that concept, with music free and unlimited, bundled into the cost of a mobile phone. So do the new link-ups between music companies and ISPs, from Sky in the UK to TDC in Denmark and other European ISPs. These are just tasters of the enormous potential for licensing and generating commercial value from music at every point where the consumer is likely to want it. Meanwhile, as this report goes to press Apple announced it had signed deals with leading record companies to offer eight million DRM-free tracks at flexible price points. Increasingly our partners in these ventures, grappling with consumer demand problems of their own, are seeing the opportunity of adding music to the value of their offering. One impressive statistic in this report is the confirmation by Danish telecoms company TDC that its music service has produced a very significant and measureable impact in retaining its broadband and mobile phone customers. That is a powerful testimony to the commercial value of music and it will strike a chord among ISPs and mobile operators elsewhere. The second dominant theme of this report is the part that record companies – also referred to in this report as “music” companies to reflect their expanding role – continue to play in bringing to market the vast majority of acts that music fans enjoy. The idea that the digital world somehow diminishes the importance of music companies is simply a myth. On the contrary, in a world where a multitude of aspiring artists are competing for visibility among millions of consumers, the music company role can only become more important in the digital future. The investment, skills, services and creative advice that labels provide remain as core a function of the music business as ever. “Governments are beginning to accept that, in the debate over ‘free content’ and engaging ISPs in protecting intellectual property rights, ‘doing nothing’ is not an option.” John Kennedy, Chairman and Chief Executive of IFPI Finally, there is a momentous debate going on about the environment on which our business, and all the people working in it, depends. This is a debate about the future not just of music but of all creative industries in a digital era where the very principle of getting rewarded for creative work is at risk. The vast growth of unlawful file-sharing quite simply threatens to put the whole music sector out of business. This report reflects the wide consensus, from major and independent record companies to managers and politicians, that a new approach is needed to protect copyright – one that involves sharing responsibility across the value chain. The debate has a huge way to go, but the campaign for ISPs to act as proper partners in helping protect intellectual property is making progress. Governments are beginning to understand the scale of the challenge of trying to monetise content in an environment where around 95 per cent of all music is downloaded without payment to artists or producers. France is leading the drive towards ISP cooperation, understanding that it is the future of French creative industries that are at stake. The UK and a growing number of countries have progressed along a similar route in 2008 and momentum will build further in 2009. This report tells the story of the music business as it is developing today. Music is the engine and heart of a large number of diverse businesses and demand for the product is growing year-by-year. Music companies are changing their business models and refining their skills in bringing artists to an ever more complex and sophisticated marketplace. Governments are beginning to accept that, in the debate over “free content” and engaging ISPs in protecting intellectual property rights, doing nothing is not an option if there is to be a future for commercial digital content. The big question for 2009 – with the focus in particular on France and the UK - is what real action will result and how quick and how effective it will be in reversing the devaluation of recorded music and helping return the industry to growth. 3 IFPI DIGITAL MUSIC REPORT 2009 Shaping a new era in digital music. The music industry is reinventing itself and its business models to meet new forms of consumer demand in an environment that has been revolutionised by new technology. In 2008 the digital music business internationally saw a sixth year of expansion, growing by an estimated 25 per cent to US$3.7 billion in trade value. “Music has never been more important to the consumer than today. Every year we are seeing increased use of music and what we are doing as music companies is finding new ways of playing into that interest,” says Thomas Hesse, president, global digital business, Sony Music Entertainment. Digital platforms now account for around 20 per cent of recorded music sales, up from 15 per cent in 2007. Recorded music is at the forefront of the online and mobile revolution, generating more revenue in percentage terms through digital platforms than the newspaper, magazine and film industries combined. Music consumption is becoming far more ubiquitous and revenue streams for music companies are expanding and diversifying. Another key change is the explosion of consumer choice as music companies work to offer music in as many ways as possible. These approaches range from à-la-carte download stores like iTunes and AmazonMP3 to subscription services, licensing of music in games and films, merchandising, brand partnerships, ad-supported streaming sites like YouTube and MySpace as well as collecting revenue generated by broadcast and public performance rights. In 2008 a plethora of new channels continued to emerge, reflecting a far more complex and sophisticated commercial landscape in which consumers are being given the opportunity to acquire music legally in many new ways. Global digital revenues by industry (2008) Digital share Games 35% Recorded music 20% Newspapers 4% New business models Films 4% Magazines 1% A pre-eminent example of the shifting business model is the growth of commerce around “music access”, with music being bundled with other services or devices. Nokia’s Comes With Music phone and TDC’s PLAY are examples of music access services launched in 2008. Others, rolled out mainly in Europe, involve partnerships with ISPs and mobile operators. Record labels see music access models as a big opportunity. “A big album worldwide will sell about seven million units but during the course of a year many more people will listen to and enjoy the album,” says Rob Wells, senior vice president, digital, Universal Music Group International: “This is about lighting up all these other consumers.” Sources: PWC Global Entertainment and Media Report (2008), IFPI A number of key themes underpin these changes. First is the unflagging consumer demand for music. In the US, research by NPD Group found that total music consumption (both licensed and unlicensed) increased by one third between 2003 and 2007. Nielsen SoundScan reports overall sales in the US hit an all time high in 2008, with music purchases across all formats totalling 1.5 billion, up 10.5 per cent. “A big album worldwide will sell about seven million units but many more people will enjoy the album. This is about lighting up all these other consumers.” Rob Wells, Senior Vice President, Digital, Universal Music Group International 4 Partnerships with technology companies are integral to the changing business model. Music industry revenues in the next few years are likely to come increasingly from revenuesharing deals with Internet Service Providers (ISPs), hardware manufacturers, handset makers and other technology companies. Technology companies look to music to add value to their services and enhance their own business model while music companies look to these partners for their enormous reach into consumers’ homes and lifestyles. “With the advent of the access model, the music industry’s economic model is at last aligned with the mobile industry’s. Both will view the world through the same lens - average revenue per user, commonly known as ARPU.” Edgar Bronfman, Chairman & Chief Executive Officer, Warner Music Group shaping a new era in digital music Michael Nash, executive vice president, digital strategy and business development, Warner Music Group, believes these partnerships will play an important role in returning the music industry to growth: “There is a multi-trillion dollar economy of digital connectivity, made up of digital networks, wireless, broadband and hardware. Music is extremely important to this economy and is also the driver of a wide range of larger industries. These industries are thinking about how to partner with the music industry in new ways. The health of the music industry is going to contribute significantly to the health of this trillion-dollar economy.” Music downloads continue to grow healthily, with AmazonMP3 joining the European market broadening consumer choice. An important development in 2008 was the licensing of more online stores to sell downloads without digital rights management (DRM), meaning consumers can play the music they acquire on any portable device. In January 2009, Apple announced it had signed deals with leading record companies to offer eight million DRMfree tracks at flexible price points. The move is expected to significantly boost download sales. Music companies are, meanwhile, commercially licensing many of the most popular channels of music discovery. One of the top brands in social networking, MySpace, extended from the world of music discovery into a commercial “The campaign against illegal music service. Video-streaming file-sharing is a fight against the sites like YouTube are hugely perverse idea that music has no popular with consumers in search cost. That illusion of “music for of music. Music companies are working on licensing arrangements free” is disastrous, particularly for to make these sites part of independent record companies the legitimate music economy producing specialised repertoire.” which respects content owners’ rights, recompenses creators Yves Riesel, President, for their work and incentivises Abeille Musique France the creation of new music. (independent label) Record labels are transforming themselves in this new environment, marrying traditional skills of artist development with new expertise in reaching consumers. Elio Leoni Sceti, chief executive of EMI Music, says this has fundamentally changed the role, though not the value, of the music company: “We don’t just sell records any more, we act wherever people experience music, from digital and physical formats to all the other ‘touchpoints’ of the music experience; from being part of the discovery process, to music in games like Rock Band and Guitar Hero or recording and selling music at live events and so on. Our role is not to put physical discs on a shelf but to reach consumers wherever they are.” This is also reflected in the new expertise music companies are bringing into their businesses. For example, Douglas Merrill, president, digital business at EMI Music, joined the company from Google in April 2008. He says that one of the big lessons from Google is to focus not on consumers’ destination sites but on the ways they discover music: “Social networks have been terrific for fans looking for bands they know, but far more challenging as a way of finding new bands. We have to help fans find music wherever they are and at the moment they want it. If we can do that we will find ways to monetise it.” Nurturing and investing in talent Along with all the dramatic changes of the digital music revolution, however, there is continuity as well. Music companies, large and small, believe their primary role in all these new business partnerships is to remain the main investors in new talent and developers of artists’ careers. The skills, expertise, investment capacity, creative understanding and, above all, the ability to connect the artists’ work with their audience will remain the music company’s role well into the future. “The record company has two fundamental roles and both are from time to time undervalued and misunderstood - one as an investor, the other as a provider of skills and services,” says Martin Mills, chairman of Beggars Group, one of the UK’s largest independent record companies: “These roles are always going to be required.” The role of ISPs and government Music’s digital reinvention is happening in an environment where the vast majority – IFPI estimates around 95 per cent – of tracks are downloaded without payment to rights holders. Online piracy is swamping the legitimate music business, harming sales, innovation, artists’ careers and investment in repertoire. Government regulation holds the key to addressing this critical issue. In 2008, France led the way internationally with draft legislation requiring ISPs to be effective partners in addressing largescale copyright theft on their networks. 5 IFPI DIGITAL MUSIC REPORT 2009 Digital music: key facts and figures. Music companies’ digital revenues internationally grew by an estimated 25 per cent in 2008 to US$3.7 billion. Digital platforms now account for around 20 per cent of recorded music sales, up from 15 per cent in 2007. The continued growth in digital sales has helped slow down the rate of decline in the overall market for recorded music. Single track downloads, up 24 per cent in 2008 to 1.4 billion units globally, continue to drive the online market, but digital albums are also growing healthily (up 37%). The top-selling digital single of 2008 was Lil Wayne’s Lollipop. A few major markets are spearheading the digital music revolution: n The US is the world leader in digital music sales, accounting for some 50 per cent of the global digital music market value. Single track downloads crossed the one billion mark for the first time in 2008, totalling 1.1 billion, up 27 per cent on 2007. Digital album sales totalled 66 million, an increase of 32 per cent (Nielsen SoundScan). Digital albums now account for 15 per cent of total album sales, compared to 10 per cent in 2007. Atlantic Records became the first sizeable label to report that the majority of its revenue is now coming through digital channels. n Japan, a predominantly mobile market, continues to be a notable success story, with digital sales helping overall trade revenues to growth in the first half of 2008. 140 million mobile singles were sold in 2008, an increase of 26 per cent on the prior year (RIAJ). n The UK saw the biggest increase in digital sales in the first half of 2008 among the top markets, with sales up by 45 per cent. 110 million single tracks were downloaded in 2008, up 42 per cent on 2007. Digital album sales also rose sharply, by 65 per cent to 10.3 million now accounting for 7.7 per cent of the albums market (OCC/ BPI). The country hosted the first launch of Nokia’s Comes With Music service and Amazon MP3 also expanded its service to British consumers in 2008. 6 n France is also seeing strong digital growth, with sales up 49 per cent in 2008. 14.5 million online single tracks were downloaded in 2008, up 20 per cent on 2007, while 1.4 million digital albums were sold, up 27 per cent (SNEP). In addition, 12 million tracks were downloaded in 2008. France is at the forefront of experiments with new “music access” models such as the revenue-sharing ventures with Neuf Cegetel, SFR and Orange. The country is leading the world in terms of government action intended to curb internet piracy. n Digital music sales in Germany are showing steady growth. Online single track downloads totalled 37.4 million in 2008, a 22 per cent growth on 2007. Digital album sales increased by 57 per cent, totalling 4.4 million (Media Control GfK International). Digital growth rates vary sharply between the US, Japan and the rest of the world. Digital accounted for 39 per cent of recorded music sales in the US in the first half of 2008 – more than four times higher than in Germany (9%). Meanwhile the proportion of US consumers’ disposable income spent on digital music is more than five times higher than in Europe. Online, US broadband users spent an average of US$12.5 on music compared to US$7.8 in the UK and just US$0.6 in Spain (2007). Many factors account for these variations. They include the different levels of mobile and broadband adoption in the different markets and variations in the use and ownership of technology. The differing strength of the physical retail sectors are also a factor, as well as piracy levels, credit card penetration and payment methods available to consumers. There are also sharp contrasts in the marketing efforts by digital services in different countries. Consumer trust in online buying also differs from country to country. shaping a new era in digital music 4.0 Digital music revenues (2008). 25% 3.7 3.5 20% 2.9 20% 2.5 15% 2.2 15% 2.0 1.5 10% 11% 1.2 1.0 0.5 0.0 % digital US$ billions 3.0 5% 0.4 5% 2% 2004 2005 2006 2007 0% 2008 Source: IFPI. Figures include online, mobile and subscription trade revenues. 2008 figures are estimates. Figures rounded and expressed on a fixed exchange rate. Top 10 Digital Single Tracks 2008 Top five digital music markets (2008) Country Digital share No. Artist Title Sales (m units) US 39% 1 Lil Wayne Lollipop 9.1 Japan 19% 2 Thelma Aoyama Sobaniirune 8.2 UK 16% 3 Flo Rida feat. T-Pain Low 8.0 France 12% 4 Leona Lewis Bleeding Love 7.7 Germany 9% 5 Timbaland Apologize 6.2 6 Greeeen Kiseki 6.2 7 Katy Perry I Kissed A Girl 5.7 8 Alicia Keys No One 5.6 9 Usher feat. Young Jeezy Love In This Club 5.6 10 Chris Brown With You 5.5 Source: IFPI. Figures reflect digital shares for the period of Jan-Jun 2008. Source: IFPI. Chart includes online single tracks, audio and video mastertones, ringback tones and full track downloads to mobile. Period of 12 months to November 2008. Sales figures are rounded. Combines all versions of the same song. Flo Rida Katy Perry Alicia Keys Lil Wayne Some top digital selling artists of 2008. 7 IFPI DIGITAL MUSIC REPORT 2009 The shift to ‘music access’. The music business is moving from a model based only on sales to one of “monetising” access to music. The introduction of “access” services is the single most important current development in the music business. While the services differ in detail, they all operate on the same principle of offering consumers access to music, either bundled with other services or as an additional subscription option. Nokia launched its Comes With Music service in the UK in the run-up to Christmas 2008. It is expected to be rolled out to other key markets in 2009. When consumers buy a Nokia Comes With Music phone, they gain unlimited music access for a year and can download songs at no additional charge. Users access the service by downloading a PC application which they can use to download from the Nokia Music Store and subsequently transfer music to their handset. At the end of the year consumers can keep all the tracks they have downloaded and continue to update their collection with à-la-carte purchases at the Nokia Music Store or upgrade to another Comes With Music handset. It is believed that the new service can grow the whole music market, not merely replace “We believe that Comes With Music will transform the way people enjoy music. With unlimited music access for a year, fans can enjoy their favourite artists or delve into new genres without having to worry about individual track or album purchases.” Tero Ojanpera, Head of Entertainment, Nokia 8 existing sales. In the UK, for example, research by TNS shows that total annual music spend averages £65, but there are huge variations above and below that average. Francis Keeling, commercial director, digital, Universal Music Group International, says this suggests the new model will complement others: “We want to convert people at the lower end of the spending spectrum through deals like Comes With Music, without cannibalising the top end of the market.” Key to Comes With Music is the offer of limitless music and the combination of subscription and ownership. “Our research shows that consumers will pay extra for a handset if they can see the benefit of gaining unlimited access to music,” says Ulrich Jaerkel, senior vice president, digital and new business development EMEA, at Sony Music Entertainment, “Some shy back if there is no ownership, which is why the Comes With Music concept is so popular. It’s about music discovery as well as keeping songs and that is popular across all demographics.” Sony Ericsson is also advancing the model of “music access”. Its PlayNow™ plus service was first launched in Sweden with operator Telenor on a special edition of Sony Ericsson Walkman phone. The service is expected to launch in other markets in early 2009. PlayNow™ plus allows users to download, play and recommend music wherever they are and whenever they like, directly over the mobile network. It offers “Ultimately, we will see all sorts of products come with music – home stereos, cars and potentially televisions. Music can become an important element that enhances the value of consumer electronics devices, providing consumers with a very complete and satisfying experience.” Thomas Hesse, President, Global Digital Business, Sony Music Entertainment high-quality audio and access to a huge music catalogue, providing 1,000 pre-loaded popular tracks on the handset and a PC player. At the end of their six to 18 month contract, users can keep up to 300 of their most played tracks on any device. Lennard Hoornik, corporate vice president and head of marketing at Sony Ericsson, says: “All mobile consumers want to have content on their phone, but many find the experience difficult, slow and time consuming. With PlayNow™ plus, there will be no more barriers, we’re giving consumers the freedom to instantly discover, download, play and recommend all the music they want - anytime, anywhere.” PlayNow™ plus is powered by Omnifone, which provides music services for use internationally by device vendors, mobile network operators and broadband providers such as Vodafone, Telenor, 3 Hong Kong and Vodacom. Omnifone chief executive Rob Lewis says: “We believe there is an increasing emphasis on services that are delivered in cooperation with device makers and we are in talks with a wide range of vendors from in-car audio providers to personal computer and set-top box manufacturers that will be delivering unlimited music services globally.” New business models for a changing environment Eric Daugan, senior vice president, digital business, at Warner Music EMEA, compares variable pricing models to the way the consumption of films is priced in the home. He explains: “A movie is free if a consumer watches it when it is scheduled on TV, they pay a little more for a ‘video on demand’ service and a premium if they buy it on DVD to watch when they want for as many times as they want. It’s a classic trade-off between payment and control.” Some Internet Service Providers (ISPs) have also begun to operate music services, bundling access to libraries of repertoire for their customers as part of their broadband and telephony packages. Denmark’s TDC launched a bundled music subscription service in April 2008. PLAY provides unlimited access to 2.2 million tracks for the company’s mobile and broadband customers that sign up to the service, without additional charge while their subscription is ongoing. Uptake for the service has been very positive, with a reported 7.2 million downloads per month and 54 million by November 2008. Average monthly users of the service now top 92,000 and the service has captured a significant share of the Danish digital market. TDC is seeing benefits from PLAY which will have caught the attention of ISPs around the world. In a very significant indication of how the music service is helping TDC retain its customers, senior executive vice president and chief strategy officer Eva Berneke observes that the “churn” – the rate at which subscribers drop the service in favour of a competitor – has fallen very substantially since the launch of TDC PLAY. The churn in mobile customers had dropped by 30 to 40 per cent and in broadband customers by some 60 per cent. In October 2008, TDC PLAY 10 was launched, allowing TDC PLAY users that are broadband subscribers to download and keep 10 tracks per month for a DKK 50 monthly fee (approximately US$9) – some 37 per cent below the average price per track in Denmark. Most of the tracks are in MP3 format. TDC also offers an à-la-carte service, TDC Play Music. “The mobile and broadband markets in Denmark are highly mature, hence focus is more on customer retention than customer acquisition.TDC PLAY is vital for us in our aim to keep our customers and stabilise our turnover.” Eva Berneke, Senior Executive Vice President & Chief Strategy Officer, TDC In another landmark deal, media giant BSkyB has partnered with Universal Music to offer a music service in the UK and Ireland. The service, expected to go live in 2009, will provide users with unlimited on-demand music listening and the opportunity to download tracks for playback at any time for a monthly fee. Songs will be playable on any device, including iPods and mobile phones. A range of subscription options is expected to be announced, offering different download packages tailored to consumers’ needs. At the time of publication, Sky is in talks with other labels about licensing their catalogues. Universal sees the Sky venture as opening up a key new market. Beth Appleton, head of digital of Universal Music Group UK, says: “Sky’s new music offering reflects the evolution we will see in the UK in 2009 as we move from a digital landscape dominated by solely owning music to hybrid models where customers will access and own music as part of an existing and familiar service with millions of potential consumers.” Neuf Cegetel, the French ISP, has been running a “music access” service since 2007, offering unlimited downloads from 150,000 tracks from Universal Music. Consumers are offered two options: Neuf Music Initial, which is available for no extra cost and offers unlimited downloads from one of nine music genres, or Neuf Music Optimal which costs an additional €4.99 and offers unlimited downloads of all Universal Music tracks. Its operators say the service has been a great success at attracting new broadband subscribers. France has other models vying for consumer interest. Musique Max from Orange is an unlimited download service. Orange internet and mobile customers can subscribe to it for an additional €12 per month. The service offers more than one million songs from major and independent labels, which are also available for permanent purchase and can be transferred to five other digital music players or compatible mobile phones. Thierry Chassagne, president of Warner Music France, explains: “Beyond charging for individual downloads, Orange’s offer represents a turning point in the development of new modes of consumption in France. It is an innovative alternative, which meets music fans’ needs for more flexibility, mobility and a richer music offering, while respecting artists’ rights.” France’s second largest mobile operator, SFR, launched a similar offering in November 2008. As part of a three-tiered service, ranging from €22.90 to €56.90 per month, SFR customers can download music on an unlimited basis. Files are DRM-free when downloaded to a PC and, so far, limited to Universal Music’s catalogue. Other European ISPs are now offering similar music services. Finnish ISP DNA launched a bundled music service in December 2008 and Swedish telecom company TeliaSonera introduced Telia Musik in six countries. 9 IFPI DIGITAL MUSIC REPORT 2009 More choice in music downloads. Music downloading continues to grow strongly internationally, with track sales up 24 per cent to 1.4 billion in 2008. Consumer choice has widened with increasing sales of downloads without digital rights management (DRM), allowing consumers to freely transfer legally acquired songs onto any device. Interoperability between platforms and devices was previously prevented by technology companies’ proprietary DRM systems. iTunes continues to be the leading player in the online à-la-carte download market. It announced in January 2009 that it had sold six billion downloads since launch and it now has a presence in 22 countries worldwide. In February 2008, it became the largest music retailer in the US, according to NPD’s MusicWatch survey. The online store carries more than eight million DRMfree licensed music tracks, as well as 20,000 TV episodes and more than 2,000 films. In January 2009 the store announced it was introducing flexible pricing for its eight million DRM-free tracks at 69 cents, 99 cents and US$1.29. Users of the third generation iPhone are able to download tracks, including ringtones, over the air. iTunes works closely with labels to market albums and premium content. The ‘complete my album’ function allows fans to redeem the price of the songs they have already downloaded from an album from the price of the complete album if they go on to purchase it. US soul singer John Legend, signed to Columbia, became the first artist to launch a global ‘complete my album’ marketing campaign with iTunes. It is clear fans place a high value on the deeper connection with artists that exclusive or additional premium content can provide. Warner Music released four singles and two EPs by Jason Mraz using a “windowing strategy” to build anticipation for the release of his album We Sing. We Dance. We Steal Things. All this extra content was included in the premium album bundle, which outsold the standard version by three to one and became the top ‘complete my album’ offering on iTunes in the US. Further evidence was provided by Madonna’s Hard Candy album, which was made available for pre-release order on iTunes in the US in April, when the premium US$13.99 version outsold the standard US$11.99 version eight to one. Amazon, one of the biggest brand names in online retail, launched its AmazonMP3 DRM-free download service in the US back in 2007. AmazonMP3 offers more than six million DRM-free MP3 tracks from all the major labels and thousands of independents. Research from NPD Group, published in April 2008, suggested Amazon’s growth in the US has not come at the expense of iTunes sales, with just 10 per cent of the store’s customers having previously bought music through iTunes. Amazon has a stronger bias to male users (64%) than iTunes (44%) and is weaker among the teen audience (3%) than iTunes (18%) in part due to iTunes gift voucher payment system. The service launched in the UK in December 2008, offering consumers selected digital albums from £3 and singles from 59 pence. Online stores are having a particular impact on music consumption in the US. Beggars Banquet, a leading independent label, reports that it regularly has new releases that sell more than 50 per cent of their copies through digital platforms in the US during the first week of release. The album Ear Park, by American indie rock band Department of Eagles, sold 66 per cent of its copies through digital channels in the first week, a record high for the label. Madonna Other download services in Europe such as 7digital, Tesco, HMV and Play.com have launched non-DRM offerings. 7digital reports that sales of tracks produced by major labels have tripled since they were made available in a DRM-free format. Some services, such as Italian-based Dada, offer a blend of subscription services and DRM-free tracks to download. 10 Download services are spreading geographically. In Latin America, established music retail store Mixup will enter the download market in Mexico in 2009, offering DRM-free downloads for the first time in the region. There have also been stepped-up efforts to improve consumer awareness of legitimate DRM-free sites. In November 2008, seven UK digital music retailers launched a new ‘MP3 compatible’ logo, in partnership with ERA (Entertainment Retailers Association) Digital, designed to help consumers identify legal DRM-free download services.