London - The international digital music sector saw a growth expansion of an estimated 25 per cent in 2008 but its business performance was still being overshadowed by unauthorized online downloads, the London-based International Federation of the Phonographic Industry (IFPI) said Friday.

Digital platforms accounted for around 20 per cent of recorded music sales in 2008, reaching a trade value of 3.7 billion dollars, IFPI said.

"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," the annual report said.

However, the music sector remained overshadowed by the "huge amount of unlicensed music distributed online," it said.

Collating separate studies in 16 countries over a three-year period, IFPI estimated that more than 40 billion files were illegally file-shared in 2008, amounting to a piracy rate of around 95 per cent.

The report highlighted the "critical problem of online piracy" and its impact on the local music sector in markets such as France and Spain.

In France, in the first half of 2008, album releases by new artists fell by 16 per cent and local repertoire accounted for 10 per cent of albums, compared to 15 per cent in the first half of 2005.

In Spain, just one new local artist featured in the Top 50 albums from January to November 2008 - compared to 10 in 2003, it said, adding that governments in France and Britain had so far been most successful in bringing piracy under control. (dpa)