Global music sales fell 7.6% to $32 billion last year, the steepest decline since the advent of the compact disc.
The International Federation of the Phonographic Industry, which represents the world's largest music companies, blamed the slump in retail music sales - now in its fourth consecutive year - on rampant piracy, poor economic conditions and competition from video games and DVDs.
Belgium, Greece, Ireland, Portugal and Switzerland saw double digit percentage declines.
But a strong second half recovery in the US, Britain and Australia, boosted by top-selling acts like Justin Timberlake and Beyonce, has raised hopes that the worst is over for the industry.
IFPI chairman Jay Berman predicted that 2004 music sales in unit terms would decline by around 4%.
Continental Europe - namely Germany, France and the Nordic countries - and Japan continued to experience steep sales declines. Berman said there was no recovery in sight in those markets.
Global CD sales - the most often cited figure in discussing the health of the industry - fell 9% in value in 2003, the IFPI said. Unit sales fell by 6.5%.
Total sales of singles, including cassettes and vinyl, which have dipped significantly since the Internet file-sharing and CD-burning craze began in the late 1990s, fell 18.7% in value terms between 2002 and 2003.
