IFPI Says 95% Of Music Downloads Are Illegal

US And They're Working On Turning ISPs Into File-Sharing Police 23/01/10

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The IFPI (International Federation of the Phonographic Industry) report that 95% of all music downloads are illegal - and they say that "cooperation from Internet Service Providers holds the key to this problem."

The IFPI made the announcement as part of their Digital Music Report 2009:

Piracy is the major barrier to growth of the legitimate digital music sector and is causing severe damage to local music industries around the world.

Three of the world's biggest music markets, all heavily dependent on local repertoire - France, Spain and Brazil - have seen a sharp slump in the fortunes of their local music industries:

In Spain, which has one of the highest rates of illegal file-sharing in Europe, sales by local artists in the top 50 have fallen by an estimated 65% between 2004 and 2009;
France, where a quarter of the internet population downloads illegally, has seen local artist album releases fall by 60% between 2003 and 2009;
In Brazil, full priced major label local album releases from the five largest music companies in 2008 were down 80% from their 2005 level.

The report shows that, while the music industry has increased its digital revenues by 940% since 2004, piracy has been the major factor behind the overall global market decline of around 30% in the same period.

The IFPI goes on to argue that we've reached a tipping point with digital music, and that governments need to look to ISPs to police file sharing. Their plan is to have ISPs use a "graduated response", warning suspected pirates first, and then disconnecting them from the Internet.

"Digital piracy remains a huge barrier to market growth and is causing a steady erosion of investment in local music. The collapse in sales and investment in France, Spain and Brazil, countries with traditionally vibrant music cultures, testify to this and are a warning to the rest of the world," said IFPI chairman and CEO John Kennedy.

Is file-sharing really the culprit in declining music sales?

Or do declining sales reflect the fact that people are skipping album purchases and just buying hit singles instead?

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