Jamie Smyth,

Technology Reporter

The value of music sales in the Republic slumped 20 per cent in 2003 as consumers shunned high street stores for the internet, and competition forced down prices.

The Irish Recording Music Association (IRMA) said provisional figures for 2003 showed unit sales of CDs, cassettes and records were also down sharply.

Its statistics show 9.19 million CDs, cassettes and records were shipped by music companies in the Republic in 2003, a fall of 10 per cent on the previous year.

"This is a very disturbing trend for the music industry," said Mr Dick Doyle, director general of IRMA.

"The haemorrhaging of sales in this manner is undermining the industry's ability to invest in new talent."

IRMA estimates that Irish consumers spent €108.5 million on CDs, cassettes and records in 2003, a sharp fall from sales of €135.9 million reported in 2002.

The industry believes sales of CDs on the internet, greater price competition and illegal copying of CDs are the main factors hurting sales. The phenomenon of illegal downloading of music using the internet is not yet a big problem in Ireland but it is an increasing threat, says Mr Doyle.

IRMA will step up a campaign to raise awareness of the dangers posed by downloading music illegally using the internet later this month. It is planning to write to companies and universities warning them that if they allow staff to use their corporate networks to download music illegally, they will be prosecuted.

The trade body is already taking a legal action against one Web retailer, CD Wow, which is selling CDs cheaply to Irish consumers on the Web. It alleges the firm is breaking the law by importing goods to the EU in breach of copyright legislation.

CD Wow, which faces a similar legal suit in Britain, is defending the case vigorously.

The fall in sales is hurting some of the big music companies.

The latest results recorded by Universal Music Ireland, one of the biggest Irish music firms, show that its annual turnover slumped to €23.1 million in 2002, down from 28 million in 2001. Pre-tax profits fell slightly to 8.2 million, from 8.7 million in 2001.

Mr Willie Kavanagh, EMI managing director, said the trend towards falling music sales was also huge in the US, where a third of music retailers closed down in just 18 months. Cheaper music online: Page 7