Music Industry Still Fears Illegal Downloads Despite Growth

The 2012 Digital Music Report from the International Federation of the Phonographic Industry [IFPI] has been released overnight and despite claims that in 2012 the music industry saw its first growth since 1999, the report shows that illegal downloading is 'rigging' the market

According to the report global recorded music revenue rose 0.3 percent to an estimated $16.5 billion. Revenue has been in decline since 1999, and predictably it was the digital sector that was keeping the numbers afloat last year with digital revenues up 9 percent. In particular download sales were up 12 percent and accounted for 70 percent of the digital revenues.

Frances Moore, IFPI's Chief Executive, said, “It is hard to remember a year for the recording industry that has begun with such a palpable buzz in the air. These are hard-won successes for an industry that has innovated, battled and transformed itself over a decade. They show how the music industry has adapted to the internet world, learned how to meet the needs of consumers and monetised the digital marketplace.”

The digital growth has been accelerated, the report says, by the prominence of music-ready electronic devices, such as phones and tablets, as well as the spread of music into markets such as Brazil and India.

Today the IFPI have used the report to once again condemn illegal downloading and brand it as the biggest threat to industry revenue.

“Our markets remain rigged by illegal free music,” Moore said. “This is a problem where governments have a critical role to play, in particular by requiring more cooperation from advertisers, search engines, ISPs and other intermediaries. These companies' activities have a decisive influence in shaping a legitimate digital music business.”

Moore says the industry's attention should be turned to internet service providers, who in IFPI's view should block illegal website, to search engines who feature them in their results and to advertisers who appear on the pages.

In the Australian section of the report – which was largely a follow-up to ARIA's report earlier this month – ARIA CEO Dan Rosen said they were working with the Government and service providers, “To ensure there is a regime in place to protect copyright online, one that rewards creators and those who invest in them. This is particularly important in light of the NBN roll-out, which without the necessary copyright protection in place, will be a catalyst for increased online piracy across the country.”

Australian revenue figures republished with permission from ARIA.