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Digital booming, though so is file-sharing: IFPI digital report
By CMU Editorial | Published on Friday 22 January 2010
Digital is booming, with global single track download sales up 10% in 2009 to 1.5 billion units, while the digital album saw sales rise by 20% in terms of volume; digital revenues overall were up 12% to $4.2 billion. Super cool disco party, right? Well, that’s all the good news used up in the first sentence, I’m afraid.
The International Federation Of The Phonographic Industry published its annual Digital Music Report yesterday, looking back at all things digital in 2009. Despite all that growth – globally digital now accounts for 27% of record industry revenues, and has grown some 940% since the arrival of the iTunes Music Store in 2003 – download and streaming services are still not compensating for the all round slump in CD sales, meaning overall revenues generated by recorded music continues to fall. Overall revenues were down 12% in the first half of 2009, and the record industry has seen a sales slump of some 30% since the aforementioned launch of iTunes.
Of course, the continued growth of widespread non-commercial piracy – file-sharing – is at least partly to blame. Or majorly to blame, if you speak to the IFPI. Their new report focuses on three markets in particular – Spain, France and Brazil – where they say rampant piracy is in danger of obliterating the local record industry and, therefore, all investment in local music talent.
In Spain, where, as previously reported, the courts have generally proved unhelpful to record companies trying to stop file-sharing, IFPI say sales of music by native Top 50 artists slumped 65% in the second half of the last decade. In France, album sales have slumped 60% since 2003, while in Brazil sales of albums by local artists are 80% down on 2005 figures. File-sharing is, of course, prolific in all three.
As previously reported, after a year of hard lobbying from the creative industries, the Spanish government this month announced plans to introduce new copyright rules that would make it easier for content owners to take action against websites that infringe their intellectual property rights, though three-strikes is not on the agenda there.
For Universal Music digital chief Rob Wells, who spoke at the launch of the IFPI report in London yesterday, unless such rules are introduced very fast it will be too little too late for the Spanish record industry.
Billboard quote him thus: “I think Spain runs the risk of turning into a cultural desert. Spain as a territory used to export vast quantities of domestic repertoire into Latin America. I think it’s a real shame that people in authority don’t see the damage being done not on a commercial basis, but on a cultural basis within their territory. From a sense of national pride I think it’s appalling. Drastic action has to be taken to save the Spanish industry”.
Of course, drastic action is already taking place in France, where a three-strikes system for combating illegal file-sharing is already on the statute book, albeit not as yet actually up and running. France has suffered more than most in the wider European music market – a couple of thousand album sales can top the chart there these days – and the country’s record labels will be hoping the new three-strikes system, considered horribly draconian by some outside the music industry, will help them reverse the ongoing decline of their sector.
Giving said French labels a bit of hope will be other IFPI data that shows that in those countries where anti-piracy laws have been stepped up record sales have seen an increase.
This includes South Korea, which was the first country to introduce a three-strikes style system last year, and Sweden, where new rules making it easier for content owners to discover the identities of and therefore sue individual file-sharers, coupled with the media coverage and result of last year’s Pirate Bay trial, has resulted in a decline in recorded online piracy.
Digital sales were up nearly three times the global average in South Korea last year, 32%, leading to an 18% increase in music sales overall. Sweden saw a whopping 98.6% increase in digital sales, resulting in a 10% revenue boost for the country’s record industry overall.
IFPI boss John Kennedy: “Much more urgency is needed [by governments]. Piracy is a massive disincentive to invest in the market. When [politicians] do engage [with legislation], we’ve seen in Sweden, Taiwan and Korea that when new laws come in it makes a difference, and that would be our message for 2010”. Presumably in a bid to bolster the case for new anti-piracy laws worldwide, Kennedy reminded everyone that file-sharing is now an issue affecting the movie and television industries as much as the record companies.
All of this is relevant in the UK, of course, because the politicians are already ‘engaging’ in the form of the copyright section of the Digital Economy Bill, which includes a form of three-strikes. Though said proposals are still strongly opposed by some, and, even if ultimately approved by most parliamentarians, may not get through the legislative process before the General Election. And while the Tories are mainly in favour of the DEB’s proposals on piracy, they oppose enough of the rest of the bill that it would likely be back to the drawing board for the entire venture if the Conservatives win the election.
