Global music sales fell 7.6 per cent last year, the fourth consecutive annual drop, with digital and physical piracy and competition taking the blame.

Figures released by the International Federation of the Phonographic Industry (IFPI) revealed that the decline affected virtually all major markets, with western Europe showing particularly sharp falls compared to recent years.

The industry has suffered a decline of 20 per cent over the past three years.

Internet piracy remains a very significant factor in the decline, according to the IFPI, which argues that this research proves overwhelmingly that unauthorised file-sharing translates directly into lost music retail sales.

However, the recording industry is making significant progress in creating its own online music business, with US-based services racking up 19.2 million legitimate downloads in the second half of 2003.

In Europe, around 30 legitimate services offered upwards of 300,000 tracks for download in 2003.

Online sales of physical CDs also continued an upward trend, with an increase in the US from 3.4 to five per cent in volume, and in the UK from 5.6 to 6.6 per cent of total units.

"Global music sales had another difficult year in 2003 under the combined effects of digital and physical piracy and competition from other entertainment products," said Jay Berman, chairman of the IFPI.

"Looking to the future, the recording industry is responding on several fronts. Record companies are making available a large volume of music catalogue for consumers to access online.

"At the same time they are stepping up the fight decisively against online piracy, starting legal actions against illegal file sharing that will be extended in the coming months."