IFPI Publishes Digital Music Report 2007

by Ulrika Lomas, for LawAndTax-News.com, Brussels

18 January 2007

According to the Digital Music Report 2007, released by the International Federation for the Phonographic Industry (IFPI) this week, record labels have become digitally literate companies, selling an estimated US$2 billion worth of music online or through mobile phones in 2006, almost doubling the market in the last year.

Digital sales now account for around 10% of the music market as record companies experiment and innovate with an array of business models and digital music products, involving hundreds of licensing partners.

However, despite this success, the Federation revealed that digital music has not yet achieved the "holy grail" of compensating for the decline in CD sales. Meanwhile, digital piracy and the devaluation of music content pose a real threat to the emerging digital music business, it argued.

IFPI's research has suggested that legal actions against large-scale P2P uploaders - some 10,000 of which were announced in 18 countries in 2006 - have helped contain piracy, reducing the proportion of internet users frequently file-sharing in key European markets.

However, the music industry body feels that actions against individual uploaders are only the second best way of dealing with the problem, is stepping up its campaign for action from ISPs and will take whatever legal steps are necessary.

According to figures contained in the report, as broadband penetration across Europe doubled to 40% between 2004 and 2006, the proportion of users regularly file-sharing fell from 18% to 14%. In the US, lawsuits were the most cited reason by computer users for changing from unauthorised P2P to legal downloading.

Key successes against illegal operators were recorded in 2006, These included Kazaa in Australia, Bearshare in the US, ZoekMP3 in Netherlands and Kuro in Taiwan.

Recommended