• The International Federation of the Phonographic Industry

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04 March 2011A report released by the International Federation of the Phonographic Industry (IFPI) shows that while the recorded music industry experienced growth in digital music sales of more than 1000 per cent from 2004 to 2010, digital piracy effectively reduced the value of the industry by nearly a third during the same period.

According to Digital Music Report for 2011, emerging artists were the hardest hit by digital piracy, with a 77 per cent drop in debut album sales between 2003 and 2010. IFPI said that with an estimated 16 per cent of recording industry revenues re-invested in emerging artists, any fall in overall revenues resulted in less investment in emerging talent. The more established acts were in a better position to combat declining sales of recorded music in the live music market, with the Pollstar report indicating that the top 5 touring acts in 2010 were Bon Jovi, AC/DC, U2, Lady Gaga and Metallica – all of which have well-established careers to bolster ticket sales.

Various measures to combat online piracy are currently being explored around the world, including cooperation with ISPs, increased availability of legitimate digital music services, and awareness programs to encourage people to source their music legitimately rather then downloading it illegally.

The IFPI report stated that various government-led ‘graduated response’ measures (where repeat infringers receive warning notices with the cooperation of ISPs) were showing some early promise. In France for example, a survey conducted by research company BVA indicated that 53 per cent of users had cut back or stopped their illegal activity since the passing of the HADOPI law (which allows infringers to be identified and contacted about their illegal activities).

IFPI also saw education as vital in reducing piracy and supported a number of public education programs, including Young People, Music and the Internet, Music Matters, Pro Music and Pop4Schools. IFPI said independent research indicated that the main reason users gave for illegally downloading material was, “because it is free”. IFPI hoped that educational campaigns would counter this mentality through the promotion of some of the 400-plus digital worldwide music services where music can be purchased legally online, as well as a range of subscription services (e.g. Spotify, Vodafone Music) that provide legitimate avenues for streaming free music.

According to Frances Moor, the chief executive of IFPI, “digital piracy, and the lack of adequate legal tools to fight it, remains the biggest threat to the future of creative industries”. However, she noted that growing momentum to reach a solution gave some grounds for optimism.