IFPI publishes Digital Music Report 2008
London, 24th January, 2008
‘REVOLUTION, INNOVATION, RESPONSIBILITY’
“2007 was the year ISP responsibility started to become an accepted principle. 2008 must be the year it becomes reality”
Governments are starting to accept that Internet Service Providers (ISPs) should take a far bigger role in protecting music on the internet, but urgent action is needed to translate this into reality, a new report from the international music industry says today.
Record companies continued their transition into a digital business in 2007. Music sales via online and mobile channels have risen from zero to an estimated US$2.9 billion – 15 per cent of industry sales - over the last five years, making music more digitally advanced than any entertainment sector except games.
Yet the spread of unlicensed music on ISP networks is choking revenues to record companies and investment in artists, despite a healthy increase in digital sales in 2007, up approximately 40 per cent on the previous year.
ISP cooperation, via systematic disconnection of infringers and the use of filtering technologies, is the most effective way copyright theft can be controlled. Independent estimates say up to 80 per cent of ISP traffic comprises distribution of copyright-infringing files.
The IFPI Digital Music Report 2008 points to French President Sarkozy’s November 2007 plan for ISP cooperation in fighting piracy as a groundbreaking example internationally. Momentum is also gathering in the UK, Sweden and Belgium. The report calls for legislative action by the European Union and other governments where existing discussions between the music industry and record companies fail to progress.
Introducing the Report, IFPI Chairman and CEO John Kennedy says: “A turning tide of opinion is one thing – a concrete programme of action is another. There is only one acceptable moment for ISPs to start taking responsibility for protecting content – and that moment is now. After years of prevarication in the discussion, the French government’s decision to seize the day is deeply refreshing. It shows an urgency of approach that is badly needed in every market where music is today being massively devalued by piracy.”
The report outlines the prospects and challenges for digital music as record companies move from a single format world to one of hundreds of formats and digital products. It shows experimentation with new revenue streams, including advertising-supported models and partnership with social networks. It also outlines the work record companies are doing in artist development and marketing of talent in the digital environment.
There is analysis of the impact of copyright theft on the legitimate music business globally, as well as the strategies of the industry’s anti-piracy actions in disrupting it. The report highlights efforts to develop a legitimate digital music business in China - where digital piracy runs at more than 99 per cent. It also outlines the work done by IFPI to curb pre-release piracy, which threatens producer and artist revenues at the most critical time of an album’s life-cycle.
The report also outlines the hidden dangers to consumers and businesses of illegal downloading, and gives a comprehensive summary of the public education work being done internationally by the record industry to improve awareness of legal online sites and of copyright.