'Tide turning on music piracy'

2006-01-20 13:34

Adam Plowright

London - Music fans worldwide downloaded 420 million songs legally over the internet in 2005, a 20-fold increase from two years ago, amid signs in some markets that the tide is turning against digital piracy, research showed on Thursday.

Record labels reaped a $1.1bn harvest from digital downloads, up from $380m the previous year, with about 40% of this revenue earned from music for mobile phones.

The research, published by the International Federation of the Phonographic Industry (IFPI), an industry-sponsored body, came a day after Apple Computer reported a 95% rise in quarterly profits.

Apple is credited with helping kickstart the legal download industry with its sleek iPod music player and its iTunes website, a library of songs that can be downloaded legally.

The success of sites such as iTunes has helped the music industry to make money from the internet, which was previously dominated by illegal file-swapping sites such as Napster and Kazaa, which enabled internet-users to swap music freely.

Optimistic about the music industry

Two million songs can now be paid for and legally downloaded over the internet and 50 legal download websites exist, including new arrivals in Argentina and China in 2005, IFPI said.

Commenting on the industry's on-going pre-occupation with piracy, chief executive of IFPI, John Kennedy, said: "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".

The tone of the report was notably upbeat following years of pessimism in the music industry that piracy over the internet could destroy major record labels and deprive artists of royalties from their songs.

Mobile phone market flourishing

However, digital music revenues account for only 6% of the sales of record companies.

The research said court action against illegal file-sharing in the United States, Australia, Taiwan and South Korea had helped to usher increasing numbers of consumers into legal, paying channels.

"Actions against illegal share-swapping, which in 2005 were extended to nearly 20 000 cases against uploaders in 17 countries, will be stepped up and spread to new countries in 2006," the IFPI said, stressing one of the key weapons used by record labels to deter piracy.

One of the fastest developing trends identified in the report was the burgeoning market for music downloads for mobile phones.

Master ringtones, which are excerpts of original songs, account for the bulk of the $400m earned by record companies from mobile music downloads in 2005.

Europe and the US lag behind Japan in the mobile music market, where mobile sales represented 96% of all digital music sales in the first quarter of 2005.

- AFP