Music fans – purchasers or parasites? The BPI decides

January 2011

Record labels, Internet

Around 7.7m people have illegally downloaded music this year in the United Kingdom according to research commissioned by the BPI, the British record industry’s trade association. Its latest report suggests more than 1.2bn tracks were pirated or shared, costing the industry £219m. The BPI’s research, based on internet users’ habits, claims that more than three quarters of music downloaded in the UK is illegally obtained, with no payment to the musicians, songwriters or music companies producing it. The research shows that 28.8% of the UK online population are involved in illegal downloading although I suspect from my own research that with the under 25 age group this is probably more like 90% – although getting music for ‘free’ is just one of a myriad of reason people use illegal sites and swap files – sometimes they just want to sample new music before buying, sometimes they are finding new bands, some support bands through paying for live shows and merchandise etc.

Geoff Taylor, Chief Executive of the BPI said illegal downloading was becoming a “parasite” despite a digital music market in the UK which is served by 67 legal downloading services. The report said that illegal mp3 pay sites and cyberlockers – sites offering space to store illicit files – are “rising alarmingly” and added that there is still no effective deterrent against illegal downloading despite the introduction of the new Digital Economy Act – which is now the subject of a judicial review after an action brought by BT and Talk Talk to strike the new law from the statute books with no practical application expected until later in 2011.  In France which already has a ‘three strikes’ law with the law HADOPI,  the music industry has recently pointed out that it considers activity so far to be very disappointing. The Director General of the French labels trade body David El Sayegh said  the music industry has already been identifying and submitting to the HADOPI Agency the IP addresses of more than 25,000 suspected file-sharers per day, and recently raised their daily submission to 50,000, but it appears that HADOPI is so far only notifying a mere 2,000 IP addresses per day – just  4% of what the music hoped for.  But see other news here on eg the new MPA action in the UK against Newzbin, BRIEN’s actions in Holland and the closure of Limewire. In the last case a US judge has now ordered an investigation into what losses the record labels actually suffered from the Limewire operation, which might prove to be a very interesting exercise.

Earlier this year the BPI reported music sales in the UK had grown for the first time in six years but it seems that the younger generations, who have never had to save pocket money to buy music, are yet to fully engage with legal download services. That said, record labels have seen legal downloads sales rise by more than 50% to £154 million, compared with £101.5 million in 2008. 50 million ditital albums have been sold in the UK and total digital sales now exceed £280.5 million, 20% of the UK’s recorded music market of £1.4 billion, although in the singles market digital makes up 98.8% of all sales. Digital album sales are just 19.6% of all sales.  Digital sales are expected to reach 160 millions sales this year, an increase of more than 10 million on 2009, although piracy is estimated at £984 million in 2010.  2010 also saw I Gotta Feeling by Black Eyed Peas become the first single to sell more than one million digital copies.

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