The effect on sales of digital music through legal and illegal distribution channels

In recent days illegal music downloads are far more than the number of music tracks sold. International Federation of the Phonographic Industry also mentioned that between the year 2005 and 2006 the sales of the global music industry fell by 11% and the ratio between pirated download to music track sold was 20 to 1 in the year of 2007. (Sherwin, 2008) The main reason behind decline of sales was due to the dawn of online music marketplace. The music distribution through these online distribution channels gained prominence due to its lower transaction cost (Elberse, 2010, pp. 74, 107-123), instant availability of music tracks, easy file sharing options and no loss in intrinsic quality of the music tracks when replayed and even after being shared several times. This enabled Apple iTunes