Have the wheels come off the latest French revolution?

France is one of a small number of countries that have recently experienced dramatic turnarounds in music sales after several years of sharp declines. According to trade association Syndicat National de l’Edition Phonographique (SNEP), the reversal in fortune began in the second half of last year and continued into the first six months of this year. Total trade revenue from recorded-music sales was up 4.1%, to €239.3 million (US$318.4 million), compared with €229.9 million in 1H09.

At this time last year, SNEP was reporting a different picture, with total trade revenues down a whopping 17.8% year-on-year in 1H09. The dramatic improvement is considered by many to have been the result of the publicity surrounding the passage of tougher legislation to control file sharing. The French body HADOPI, which is coordinating the three-strikes antipiracy measures, has undertaken a public-awareness campaign to explain how the process will work and is thought to have already started contacting ISPs to get hold of the identities of suspected file sharers.

But a comparison of the 1H10 figures with the 1Q10 figures SNEP published in May suggests that the turnaround might not be as pronounced as it seems. According to SNEP, trade revenues from physical-album sales were down 2% year-on-year in 1H10, to €169.8 million. But in 1Q10, physical-album sales were up 4% year-on-year. This suggests that in 2Q10, physical-album sales were down about 8% year-on-year.

For hard-format music videos, much of the 53.2% growth seen in 1H10 came in the second quarter. Music & Copyright has calculated that music-video sales were up about 150% year-on-year in 2Q10. SNEP said that the high growth was largely due to strong sales of U2’s U2 360° At the Rose Bowl DVD and music-DVD releases by French-Canadian artist Mylene Farmer and local artist Johnny Hallyday. Overall physical-trade revenues were up 2.5% year-on-year in 1H10, and 1Q10 revenues alone were up 4.3%. This suggests that in 2Q10, overall physical trade revenues were flat year-on-year.

Breaking down the half-year figures by quarter raises serious questions about the digital sector. According to SNEP, Internet download sales were up 30.3% year-on-year in 1H10, and online singles accounted for the largest share of overall digital sales. But in the first quarter, year-on-year growth of online sales was much higher, at 50.5%. This means growth slowed considerably in the second quarter, to just 14%. Most concerning, however, is the overall digital figure. SNEP said that total digital sales were up 12% year-on-year in 1H10, to €42.9 million. But for the first quarter, year-on-year growth was 28.7%, to €23.1 million. This means that digital sales in the second quarter totaled €19.8 million, equivalent to a year-on-year fall of almost 3% and a quarter-on-quarter drop of 14%.

It is still too early to assess how tough legal action is affecting file-sharing, but the French music industry must be concerned that the quick turnaround in recorded-music sales could be coming to an equally abrupt end. French music-sales figures for 3Q10 might be buoyed by the action by HADOPI . But if further evidence emerges that the French music market is weakening, the link between tougher legislation and rising music sales might seem much less strong.

Music & Copyright is a fortnightly research service published by Informa Telecoms & Media.