LONDON — The global music market in 2004 enjoyed its best performance in five years.

Shipments of physical formats reached $33.6 billion, a 1.3% drop in value compared to 2003 figures, according to statistics unveiled March 22 by the International Federation of the Phonographic Industry. The worldwide market registered a year-on-year 0.4% drop in volume to 2.75 billion units.

The IFPI’s figures incorporate only physical sales of audio and music video carriers. The trade group estimates that if online and mobile sales of digital music were taken into account, overall global sales would be flat in comparison with 2003.

IFPI chairman/CEO John Kennedy says in a statement, “There are now good signs that the pattern of falling sales is behind us, but there is still a long way to go to get satisfactory rates of market growth.”

The IFPI notes that strong performances in the United States and the United Kingdom, and a slowing rate of decline in a number of other markets (most notably Germany), helped secure what it describes as “the best year-on-year trend in global music sales for five years.”

“2004 was a pretty good year for the industry because the continuous drop we experienced in [recent] years almost stopped,” Universal Music International chairman/CEO Jorgen Larsen tellsELW. Although he maintains that physical and online piracy continue to threaten the industry, Larsen highlights the positive effect of the maturing legitimate download market.

The IFPI confirms that the slight downturn in physical audio shipments was offset by increasing demand for DVD music video and the development of the digital music business.

At $28.9 billion, CD album shipments in 2004 were down 0.9% in value compared with 2003. CD albums still accounted for 86% of total sales, the same figure as the previous year. Shipments of audio formats (CD, vinyl, cassette, MiniDisc, SACD) fell 2.6% in value to $30.9 billion. Shipments of music DVD rose 23.2% to $2.7 billion and now account for 8% of the total value, vs. 6% in 2003.

The United States remained by a wide margin the world’s largest market in 2004, increasing its lead over No. 2 Japan. Shipments in the United States rose 2.6% to $12.1 billion. The Japanese market experienced another year of declines, with shipments down 1.8% to $5.1 billion.

Shipments of top-selling albums appear to have reversed several years of decline. 2004’s top 50 albums were up 8% in value compared with those of 2003. According to the IFPI, eight albums sold more than 5 million copies in 2004, vs. five in the previous year. The top-selling album in 2004 was Usher’s “Confessions” (LaFace/Zomba), followed by Norah Jones’ “Feels Like Home” (Blue Note) and Eminem’s “Encore” (Interscope).

The IFPI collects data from its national groups. The figures are based on shipments to retail, adjusted for returns. The trade group is starting to compile data from downloads, digital subscriptions and mobile sales, but sources at the organization say the results are not yet ready for publication. However, industry estimates suggest that download sales represent 1%-1.5% of overall sales.