THE troubled music industry faces at least another two years of recession as internet pirates become more sophisticated and the threat of economic slowdown deters potential buyers, a new survey says.

Sales of singles and albums will fall by more than 7 per cent this year to just over $31 billion (£19.6 billion) — the third fall in a row, the report, published by Informa Media, cautions.

The report, Global Music Industry: Facts and Forecasts, predicts that sales will plunge again in 2003 and 2004, and that record companies will only stem the fall by limiting the way music can be downloaded and copied off the internet.

The study suggests that more effective control of CD copying will be in place by 2005 and that music industry sales will take until 2007 to beat last year’s levels.

Simon Dyson, author of the report, highlights the dire state of the industry, pointing out that it will take many more years for record companies to repeat the success of 1999, when industry sales hit $38.6 billion. Apart from the problems of piracy the industry has suffered from a failure to establish new formats. Neither pre-recorded minidiscs nor digital compact cassettes made it, and there is scepticism over the fate of the Super Audio CD and DVD-Audio as mainstream formats. Meanwhile, singles have continued their apparently remorseless decline and the switchover to CDs is now complete.

Ironically, the rising popularity of recordable CD players, which is supporting demand for CDs, is likely to hamper any recovery, as it is most likely to encourage piracy, the report argues.