The music industry just had a bumper year last year with digital download sales topping 1 billion for the first time but the biggest issue of piracy is not going away.
According to data released by IFPI Communications in the UK this week, it is estimated that more than 40 billion illegal downloads of songs occurred during 2008.While digital downloads accounted for revenues of around $3.7 billion last year, it is estimated than more than 95% of downloads are still via illegal means.
Digital sales in 2008 were up 36% on the previous year. The top selling digital single was Lil Wayne’s ‘Lollipop’ with 9.1 million units sold.
However, the report sees an urgent need for the music industry to accelerate the reinvention of itself.
One way for the music industry to secure a future is to consider itself a utilities industry instead of a manufacturing industry.
IFPI see the forward thinking subscription services and online licensing as being a safeguard for the future.
In the US, Nokia has already introduced its Comes With Music product, which supplies music, bundled in a licensing deal with your phone plan.
Amazon has an a-la-carte music download program giving music fans a far greater choice for their buck.
However, the problem is still the gap in relationship between the music companies and Internet Service Providers.
Only France and the UK have done anything to bring this under control and New Zealand is active.
France introduced a law which makes ISP’s write to copyright infringers to warn, and educate them about their actions before removing their Internet access and reporting the abuse as a crime.
The UK is brokering discussions between music and film companies and the countries largest ISPs.
New Zealand is also acting. Copyright infringers will have their accounts cancelled for repeat offences from February.
The US, Italy, Australia, Japan, Hong Kong and South Korea are in discussions but a roadmap has not yet been determined.
The IFPI Digital Music Report is calling for ISP cooperation in 2009 and for music companies to embrace new revenue models instead of fighting them.
