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95% Music Downloads Illegal, Industry Grows Nevertheless

Gordon Kelly by

95% Music Downloads Illegal, Industry Grows Nevertheless

Thought the introduction of DRM free music and the seemingly huge sales of iTunes, Amazon MP3 and the like were finally making an impression on piracy? Don't be daft...

A report from industry body the IFPI has today declared that while "music companies embrace new revenue models, offering consumers more choice" 95 per cent of music downloads remain unauthorised with no payment to artists and producers. More ominously/predictably, the IFPI also calls for 2009 to be the year ISPs team up with the music industry to fight this.

"The recorded music industry is reinventing itself and its business models," explained IFPI chairman and chef executive John Kennedy. "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."

"There is a momentous debate going on about the environment on which our business, and all the people working in it, depends," he continued. "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."

To be fair, this is rather melodramatic. There will always be commercial digital content and there will always be piracy. For many, no matter how good the model nothing can compete with free. Furthermore, basing its study over a three year period seems daft when the real innovation has only come in the last 12/18 months. It would have been more interesting to see figures for this period only.

On top of this the IFPI admits the digital music business internationally "saw a sixth year of expansion in 2008, growing by an estimated 25 per cent to US$3.7 billion in trade value" and that "recorded music is at the forefront of the online and mobile revolution, generating more revenue in percentage terms through digital platforms than the newspaper (4%), magazine (1%) and film industries (4%) combined."

Getting ISPs to snoop on their customers isn't the answer, continued innovation and development is. Personally I always liked the idea of a BBC style fee enforced per country were every single person paid a compulsory £2/3 per month and all music was free. In reality it would likely be far too difficult to implement but that would be the end of piracy...

Anyone else have any grand solutions?

Links:

Press Release

Full Report (PDF Warning)

Go to comments

Ohmz

January 16, 2009, 9:02 pm

95% is awfully high. I have never obtained music illegally, something the vast majority of people I know cannot claim. I really believe it has to do with character. I think I'm a moral person and although my friends aren't bad people per se, they just don't see the big deal about it. Oh well, attitudes need to change.

Chris

January 16, 2009, 9:30 pm

Piracy will always exist as long is there is no fool-proof way to prevent it. I think that far less music would be pirated if the sales model was changed. If you could make legal downloads so cheap, so convenient and such high quality that poeple can't be bothered with the pirated version, maybe these numbers would change. Maybe the demise of the megaconglomorate record labels would bring this about?

smc8788

January 16, 2009, 9:56 pm

Hmm....95% seems a bit, no wait....*very* high, I'm not sure where they came up with that number. Of all the people I know that use music downloads as their primary form of obtaining music content (including myself), none of them use or have ever (or so they tell me) used illegal downloads from unscrupulous websites or file sharing clients. There are many excellent sites to get content, with 7digital being my personal favourite (I try to use iTunes as little as possible) but the main problem with digital downloads is the availability of content as there are times when no matter where I look I can't seem to find a particular band or album, so I am forced to buy the CD which is generally more readily available, but is also a bit of an inconvenience.

Ed

January 16, 2009, 10:12 pm

Sounds about right to me. When you consider the likely demographics of people that download music of any sort and find that most of them are kids or students, it's not surprising at all. It's at this age that most people are into music in a big way and will do anything to get it. It's also the age at which we have limited funds. Combine the two and you will always have an underbelly of illegal music exchange. It may transition over the next 5 to 10 years as the youth that have grown up with music downloads become adults and move to legal services but I think the process is cyclic and as the youth of today grow up they are replaced by the youth of tomorrow.

Ohmz

January 16, 2009, 10:28 pm

Ed I agree with you, however when I didn't have money, I did without. It's called character or morality, something that is sorely lacking in all aspects of life today it seems....

smc8788

January 16, 2009, 10:38 pm

OK then, so if there have been over 6 billion (legal!) downloads from iTunes (let alone any other site selling legal music downloads) that means there have been at the very least 114 billion illegal downloads, or 17.5 for every person on the planet. Now factor in how many of the worlds population are kids/students with access to a computer, knowledge of how to use file sharing systems, a keen interest in music but do not buy CDs, not much disposable income, loose morals and that figure surely rises into at least the thousands of songs for each illegal downloader/pirate.

rav

January 16, 2009, 11:06 pm

It does make me smile to see the big labels struggling. If they hadn't wasted years trying to flog DRM'd tracks to us then maybe they'd be in a much better position now.





Even now they're still taking the mickey when they get the chance. I had a pop up in iTunes the other day asking if I wanted to upgrade the music I'd already paid for to DRM free versions for an extra fee! If it wasn't for the trouble I'd actually be tempted to obtain these from other sources and stuff the fee and personally wouldn't condemn someone who did.

the-one

January 17, 2009, 9:06 am

haha, that means 5% of all music downloaders are suckers (that's a bad character).

Guest

January 17, 2009, 9:41 am

I love the "oh morality is going down the pan, and it wasn't like it years ago, etc, etc." Why didn't you go on and suggest that music downloading leads on to drugs, alcohol abuse, and any other crime you care to think of? Oh please, don't be so naive!





As far as I can tell, today is no different to 20 years ago when we used to tape the top 40 each week off the radio and then swap them with our mates, or bought our favourite records and swapped them with our mates to record onto cassette. The record industry didn't loose out....because we still spent as much money as we could afford on music. But the stuff we weren't so sure about we aquired off friends. If anything this may have helped the music industry as we listened to more music and got to like more artists than we otherwise would have done - meaning we may well have bought their records next time around.





I don't see this being any different today - it is just that the technology makes it so much easier to acquire music (be it downloading, sharing CD's or memory sticks, etc...), hence people end up building up huge collections of stuff - 90% of which they probably hardly ever listen to, but it is like "oh well, I might as well have it......just in case, kind of thing". I am sure some just acquire stuff just for the "status" of it ("My ipod has more tracks on it than yours, ner na na ner na!!")





A much more interesting and relevant statistic I feel would be how much money, per person, are people spending on music and also what percentage they are spending vs that on other forms on entertainment. The choice of entertainment media today is massive to say 20 years ago. You have the whole video games industry now, DVD movies weren't around then and certainly owning films wasn't common place as it is now. Also, look how expensive big concerts are now - you can spend "6 albums worth, or more" going to just one concert to see you favourite band. Music has so much more competition now compared to years gone by, so it is hardly surprising that sales of slowed over the years. Yet, of course the "music industry" blames EVERYTHING on the illegal pirating of music for their woes. Absolute rubbish I say! I am sure they have lost some sales due to piracy, but numbers like 95% are a joke.





If downloading is made more difficult then I would suggest that people would just have less music in their collections - not that they would spend more money on it.





I also agree with the comments about DRM doing them no favours at all - remember the Sony CD's that could render your PC unusable? Who did that hurt - not the pirates, that's for certain!





Phew, that's better....Climbs down off high horse....Rant over. ;-)

Gnormie

January 17, 2009, 8:50 pm

"music companies embrace new revenue models, offering consumers more choice"





BS, they've continued to object to change, cling onto dying business models and litigate to maintain that position whilst standing in the way of progress (and civil rights) because they are afraid that it may in some way be used to impact on their profit margins.





They continue to bully ISP's into doing their bidding even though that it is a logistical nightmare and perhaps not even possible to monitor piracy without a large margin of error. And continue to support their campaign with figures that are at best pulled from their nether regions, when will people understand the simple concept that:





PIRATES WILL NOT PAY





whether the torrent is available or not they will not give you their money, your figures of 'lost revenue' are meaningless as you never would have seen it in the first place.





I'm not defending piracy, I know it's wrong, but to fight it with heavy handed measures that do nothing to curb piracy and everything to annoy the legitimate customers is worse then what any pirate has ever done.

Slappy

January 19, 2009, 11:31 am

According to Wikipedia, iTunes has sold 6 billion songs (assuming in the US http://en.wikipedia.org/wiki/I.... Taking that with a grain of salt, but, using the figure for sake of argument, that means that approximately 120 billion songs were downloaded in total. Which using an approximate population for the planet of 7 billion means that in 6 years, the music industry thinks every human being on the planet has downloaded an average of 17 songs?





Really?

itsallgonepearshaped

January 19, 2009, 1:32 pm

I'm sorry, 95% very much seems to be a finger in the air amount. Back in the old days, when I were a yoof, and Napster were all the rage, yes I would download hundreds and hundreds of tracks. How many would i listen to? 10%? Probably.


So while the act of downloading is technically the criminal act, the actual numbers of tracks that would have been bought as a CD or legitimate download is likely to be much much much lower.


You have to also consider the demographics of who downloads as has been said, kids do not have money to spend on CD's, so therefore opportunity cost is low. Foreign countries of the 2nd / 3rd world variety would not have access (nor disposable income) to CD's, so again opportunity cost is low.


I really hate it when companies like this put out a generic statement that can be torn apart with litle effort, but where (most) of jo public ends up believing the headline: 'we're in the middle of a crisis'.

mr dog

January 19, 2009, 1:42 pm

I think everyone are looking at these statistics wrongly. It is 95% of all music downloaded is downloaded illegaly, not that 95% of people are downloading their music illegally. It is simply due to the fact that if you are paying iTunes per track or per album you are far more unlikely to consume your music in the way that people who use torrents or rapidshare do.


if someone hears one song playing on BBC 6 for instance, that person can fire up google and have the album on their hard drive within about three minutes, so basically in the time it takes for one song to play they have the whole album. now imagine they can do this for every track played in a three hour radio show whereas the consumer who is actually paying per track would probably only get maybe a single or an album if they have the money. so there's a 10:1 ratio right there so 60bn:6bn in terms of what iTunes has sold.


I know the Trusted Reviews staff have been banging on about this for years but it just shows how a flat-fee based business model would suit everyone. If you didn't have to trawl through blogs or aggregators or torrent sites, run the risk of infecting your computer with a virus everytime you unpack a rar or zip file of the latest Jefferson Starship release and could just fire up iTunes and download whatever you watned whenever you wanted without having to worry about credits, debits and tiered pricing everyone would be a lot happier and the pirates would have no chance.


You can see the idea kind of hiding behind such things as Nokia's Comes With Music, but it is still not at a stage that the affordability:convenience factor has been ironed

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