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Sales of legally downloaded digital music passed the $1bn mark last year thanks to more legitimate online music stores and mobile phone ringtones, said the music industry’s leading trade body.

However, the International Federation of Phonographic Industry also warned that the upsurge was largely thanks to new downloaders while most illegal filesharers were not migrating on to authorised sites, and added it would be stepping up its campaign of legal deterrents.

The IFPI said digital music sales tripled to $1.1bn from $380m in 2004 and predicted “further significant growth” this year.

The rise came amid an explosion of activity in the sector, with digital music players becoming the accessory of choice and fans legally downloading 420m tracks from the internet - 20 times more than two years ago - while the volume of music licensed by record companies doubled to more than 2m songs. Digital music now accounts for about 6 per cent of record companies’ revenues.

Meanwhile, the IFPI claimed that illegal downloading activity was “static” despite a 26 per cent rise in broadband use over the year.

“Already in the UK and Germany - two of the biggest digital markets worldwide - legal buyers from sites like iTunes, Musicload and MSN actually exceed illegal file-swappers. We expect this trend to spread as new and pioneering legal music distribution channels open up to consumers,” said John Kennedy, IFPI chairman and chief executive.

The success of iTunes, Apple’s market leading online music store, has inspired many others to follow suit with the number of legal downloading sites increasing to 335 from 50 two years ago. Stores popped up across the globe with the music downloading services arriving in China and Argentina for the first time and iTunes now available in 21 countries.

Digital music charts raised the market’s profile, with James Blunt’s ubiquitous “You’re Beautiful” generating huge sales topping Europe’s first digital music chart, while the Arctic Monkeys digital-only single “I Bet You Look Good On The Dancefloor” reached number one on the traditional UK charts.

Music downloaded to mobile phones also took off as new enabled handsets hit the stores and demand for favourite ringtones soared. In Japan, mobile music’s most developed market, sales reached $211m - or 96 per cent of all the country’s digital music sales - in the first quarter of the year. Worldwide, the IFPI said mobile music now accounted for about 40 per cent of record company digital revenues.

The music body said that a series of court judgements against unauthorised file-sharing services in 2005 - in the US, Australia, Taiwan and South Korea - had changed attitudes to piracy, with research showing that half the illegal downloaders that had stopped their activity did so because of the legal risk.

However, it spoke out against “complacency” and asked governments, music distributors and ISPs to do more to help stamp out illegal downloading and persuade perpetrators to change their ways.

“Shifting illegal fire-sharers to legal digital services is...a long-term challenge. The research indicates that legal downloaders are more likely to be starting from scratch than migrating from unauthorised sites. Only one in five legal music downloaders is also an illegal file-swapper,” the IFPI said.

Last year, 20,000 actions across 17 countries were proceeding against illegal file-sharing and the IFPI promised more this year, as well as promoting the use of digital rights management software - which helps prevent illegal copying - and increasing education and marketing.

Copyright The Financial Times Limited 2017. All rights reserved.
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