Record labels, internet
The IFPI’s Digital Music Report 2012 has just been published and headline figures from the record industry’s global trade body show
- Major international music services which include streaming services like Spotify are now in 58 countries, up from 23 in January 2011
- Digital music revenues are up 8 per cent to US$5.2 billion
- The IFPI say that anti-piracy action has made an impact in France, New Zealand with the US to follow in 2012 but the IFPI says that piracy and the ‘legal environment’ remain a problem
- The IFPI say that consumers are benefitting from a widening choice of services for experiencing digital music. In 2011, subscription services expanded and linked with new partners to reach new audiences. Meanwhile cloud technology is helping transform the way fans manage and store their music.
- Global revenues to record companies grew by an estimated 8 per cent to US$5.2 billion in 2011 – a faster rate than 2010 – with strong consumer demand for both single track downloads (up 11 per cent by volume), digital albums (up 24 per cent by volume) and fast-expanding subscription services. The number of users paying to subscribe to a music service leapt by 65 per cent in 2011 to 13.4 million worldwide, according to IFPI estimates.
- In the US, the world’s largest music market, digital channels have overtaken physical formats to become the primary source of revenues for record companies. Globally, 32 per cent of music industry revenues come from digital sources, far surpassing the film, newspaper and book sectors. New services launched across Latin America, while in China record companies are working in a landmark partnership with the largest internet company Baidu.
- The IFPI says that piracy remains an enormous barrier to sustainable growth in digital music. Globally, one in four internet users (28%) regularly access unlicensed services, according to IFPI/Nielsen. This is rigging the market for legitimate services, stunting growth and jeopardising investment in music. IFPI advocates an inclusive combination of graduated response, site-blocking and other measures to tackle the problem.
- There has been positive momentum in the fight against piracy in 2011. In France, the introduction of the new Hadopi graduated response law has seen peer-to-peer (P2P) piracy levels decline by 26 per cent, with around two million P2P users stopping the activity since warning notices were first sent out in October 2010 (according to IFPI/Nielsen).
- There was important progress elsewhere too. In New Zealand, a new graduated response law took effect in September 2011, with early indications of impact. In Europe the IFPI say that a string of court judgments has helped reduce copyright infringing activity on major sites like The Pirate Bay. In Belgium and Italy visits to the infringing sites dropped by 70-80 per cent in each case. In Spain a new law came into force to allow the blocking of illegal websites – a positive step, though disappointingly limited in its scope. The ‘slow progress’ in implementing the Digital Economy Act in the UK comes in for criticism as ‘disappointing’ when compared to eg France. The first warning letters to repeat infringers under the DEA are not planned to go out until 2013 and Frances Moore, chief executive of the IFPI, also criticised internet service providers saying: “The ISPs, instead of getting on and helping us to implement the law, have challenged us in every court”.
- The recorded music industry is now working directly with advertisers, payment providers, search engines and website hosts to tackle digital piracy. A partnership struck in 2011 between IFPI, the City of London Police and payment providers MasterCard, Visa and PayPal has prevented more than 60 illegal websites from abusing payment services since it began in March 2011.
- Better cooperation is being sought with search engines, which are a major channel for consumers to access music. The IFPI says that research in several countries indicates that between a quarter and a half of people illegally downloading access infringing music via search engines. However, many of the top results provided by search engines are linked to unauthorised content or sites which regularly infringe copyright.