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Digital music sales up 40%; piracy at 20-to-1?

updated 01:45 pm EST, Thu January 24, 2008

IFPI Music Sales in 2007

Direct-download music sales saw one of its most significant increases yet in 2007 but is being "choked" by piracy, says a new report from the IFPI. The international music association notes that sales of music online grew by 40 percent last year to produce about $2.9 billion in sales and was large enough to account for a significant portion of some countries' entire music sales. Internet sales now represent about 15 percent of all music sold in the world and account for 15 percent in the US specifically, according to the IFPI. Single-track downloads comprised a large part of the success and grew by 53 percent to 1.7 billion individual songs.

This success is still undermined by illegal trading, the organization claims. In addition to failing to offset a drop in CD sales, legal sales are also said to have been eclipsed by the "tens of billions" of illegal copies traded online, with as much as a 20-to-1 ratio of illegal to legal songs, the group estimates. The report also contends that US labels alone lost as much as $3.7 billion in revenue due to piracy and that frequent peer-to-peer users buy fewer CDs, though it does not say whether the revenue number accounts for users whose habits would not have changed without the illegal option in place.

The report in turn claims that filtering at the Internet service provider level is the "most effective" way to eliminate piracy and cites a move by the French government to require filtering of illegal material as a positive step, also pointing to similar proposed options in Belgium, Sweden, and the UK. Implementing the technique would remove the temptation to pirate tracks by making the downloads themselves impossible.

"There is only one acceptable moment for ISPs to start taking responsibility for protecting content - and that moment is now," IFPI chair John Kennedy argues.

AT&T is also reportedly considering similar actions for its network traffic in the US but has not received government backing for such a plan, which has received resistance from advocacy groups.



By Electronista Staff
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  1. eldarkus

    Fresh-Faced Recruit

    Joined: Feb 2004

    0

    filtering

    ...is c***. Al you have to do to defeat it is use a password protected .rar a file with extra material in it and no filter will ever catch it.

    and lets not forget all of the false positives of legal files it will catch.

  1. ClevelandAdv

    Fresh-Faced Recruit

    Joined: Jul 2004

    0

    Slow illegal file swappin

    I still believe that one of the s best ways to battle piracy is making a quality file (without DRM) readily available for a fair price.

    I have had to resort to file sharing when I could not purchase a song online, which is still the case for many songs / albums / artists.

  1. dynsight

    Fresh-Faced Recruit

    Joined: May 2005

    0

    DRM Free (Radiohead)

    I always thought that DRM free music easily accessible and inexpensive (maybe $.50 - $.75 a song, $5 an album) BUT a lot of people who went to the radiohead site to download In Rainbows ended up paying nothing (other than the handling fee). I believe the number was 40%-50% or so. I was disappointed to hear this. I was hoping people would pay something.

  1. vasic

    Fresh-Faced Recruit

    Joined: May 2005

    0

    Totally agree!

    There are two ways to do this: the Soviet (or North Korean) way, or the open way. The soviet model: prohibit foreign movies, books, magazines, severely punish those who read, watch, distribute or even talk about anything foreign, in order to preserve your system. People will try to escape your system in order to access the stuff they want. The open way: give people open access to what they want. Some (few) will still want to escape, but most others will stay.

    Perhaps the metaphor is a bit stretched, but the point is, only simple easy and unburdened legal download solution(s) will sway vast majority of current pirates over to the legal side.

    There are many in the developed world who CAN afford downloads, but find few solutions. If someone tried to do a comparative study between the countries where iTunes store operates and those where there isn't one, and compare trends since before iTunes opened, I wouldn't be surprised if very clear trends emerged from such a study.

    If you let them buy it cheap, they won't bother with the (still somewhat convoluted) effort to steal it.

  1. vasic

    Fresh-Faced Recruit

    Joined: May 2005

    0

    radiohead experiment

    The Radiohead experiment was very indicative. It proved that there would be a large number of people who are ready to pay. The study mentioned in the article above mentions 20:1 ratio. Radiohead experiment proves that the ratio might be closer to 2:1 (for every paid download, two went for free). Further study of Radiohead's web logs would probably demonstrate that those free downloads went to countries with poor legal download framework, where the piracy awareness is generally low. In the end, the experiment only proved that people are generally willing to pay when given a choice.

  1. Athens

    Addicted to MacNN

    Joined: Jan 2003

    0

    easy fix

    Drop the price of CDs, I stopped buying CDs because they cost to much.

  1. climacs

    Dedicated MacNNer

    Joined: Sep 2001

    0

    re: easy fix

    the problem is there is a whole industry whose entire infrastructure is predicated upon being financed by CD sales at ridiculous prices. Until the recording industry reshapes itself so that it does not demand these kinds of prices to sustain itself, the music industry majors will continue to insist on getting paid way more than their product is worth, and piracy will go on unabated.

    After all, how much of that money actually filters down to the artists? Ha!

  1. Titanium Man

    Forum Regular

    Joined: Mar 2001

    0

    45rpm singles

    Once upon a time, single songs (okay, with B sides) were available dirt cheap for everybody on 45rpm records. It's their own damn fault that they got greedy and insisted that everyone buy full albums on CDs. Even the so-called CD singles cost something like $5. Absolutely insane. On top of that, there's no new music I like anyway. Goodbye, music industry. I won't miss you.

  1. testudo

    Forum Regular

    Joined: Aug 2001

    0

    Re: radiohead

    Where are you getting your numbers for the 2:1 ratio? Radiohead declined to give any details on how much they sold or what people paid.

    However, I don't think it's disappointing to count all those who paid nothing. Not having tried to download the album, I don't know how it was set up. But you want answers to bigger questions:

    1) How many people who downloaded the album and paid little to nothing still have the album (i.e. liked the album).

    2) How many people who downloaded the album for free came back after they liked what they heard and paid for it (try before you buy - much better then trying to figure something out on 30 second clips of songs).

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