95% of music downloads are illegal
Despite a boom in digital music sales, an industry report has found that the majority of online music was downloaded for free with no payments made to artists
Ninety-five per cent of music available online is downloaded illegally, according to a report by the International Federation of the Phonographic Industry. Despite a record growth in digital music sales last year, and an industry that has "transformed its business models", the report says the majority of music was downloaded for free with no payments made to artists.
The report highlights a new generation of subscription services for digital music, including the evolution of social networking sites such as MySpace Music, as evidence that the industry is adapting to the digital environment. There was also a rapid expansion in mobile phone partnerships such as Nokia Comes With Music, which claims to offer unlimited free music to its clients for an annual fee.
"Music companies have changed their whole approach to doing business, reshaped their operations and responded to the dramatic transformation in the way music is distributed and consumed," said John Kennedy, chairman and chief executive of IFPI. However, it doesn't seem to have curbed the boom in online piracy. Research carried out in 16 countries by the recording industry body found that over 40bn files were illegally shared in 2008.
On the positive side, paid-for single track downloads saw a 24% global rise in 2008, while digital albums were up 36%. It is estimated that the digital sales are now worth $.3.7bn worldwide (£2.5bn).
"There is a momentous debate going on about the environment on which our business, and all the people working in it, depends," said Kennedy. "Governments are beginning to accept that, in the debate over 'free content' and engaging ISPs in protecting intellectual property rights, doing nothing is not an option if there is to be a future for commercial digital content."