Although worldwide digital music sales rose in 2009, piracy is still taking its toll on the recording industry.
In its latest number crunching, international music body IFPI (International Federation of the Phonographic Industry) reports that global digital music revenues reached $4.2 billion, a 12 percent increase in 2009.
The IFPI also reports that more than a quarter of all recorded music revenues came from digital channels and that sales of single track downloads increased by an estimated 10 percent while digital album sales rose approximately 20 percent.
However, total revenue, including CD sales, dropped 12 percent in the first half of 2009, continuing a downward trend that has seen sales drop by 30 percent since 2004.
While the report mentions that there are more legitimate channels for music distribution than ever before, piracy continues to be the recording industry’s worst nightmare. The IFPI estimates illicit downloads make up approximately 95 percent of all music downloaded worldwide.
The IFPI report also spotlights three countries known for their music – France, Spain and Brazil – showing that piracy has damaged each country’s recorded music industry.
According to the organization, Spain, which has the highest number of illegal downloaders, saw sales by local artists in the top 50 fall by about 65 percent between 2004 and 2009. Meanwhile, France experienced a 60 percent decline in local releases.
Brazil’s recording industry also took a major hit as full-priced, major label, local album releases from the five largest music companies dropped 80 percent in 2008 from their 2005 level.
Along with issuing its report, the IFPI praised efforts to increase digital distribution channels and licensing deals with services such as Spotify and MySpace Music, as well as agreements with Internet service providers including Denmark’s TDC and U.K.’s Sky.
But the report also says current ISP licensing deals are not enough and that more ISPs must take an active stance in keeping illicit downloads from traversing their networks.
The organization also cited countries that have passed legislation designed to curb illegal file-sharing, such as “three strike” laws calling for repeat offenders to be disconnected from the ‘Net. In addition to bemoaning music piracy, the IFPI made it clear that it’s not only recording companies that are suffering, but also other entertainment industries, such as film and television.
“In 2009 the mood has crucially changed,” IFPI president / CEO John Kennedy said.
“It is now accepted that this is about the future of a broad base of creative industries that have huge economic importance and employ vast numbers of people. Governments, led by France, South Korea, Taiwan, the U.K. and New Zealand led the way in 2009 by adopting or proposing legislation to tackle piracy. It is vital these efforts are seen through to their conclusion and followed by other governments in 2010.”
Click here to read the complete IFPI report.