IFPI Report: 95 Percent Of Music Downloads Are Illegal

Digital music sales are growing faster than ever — but the music industry’s task in convincing music fans to pay for their music looks truly massive. More than 40 billion music tracks were illegally file-shared in 2008 — meaning that 95 percent of all music downloads worldwide last year were illegal, according to a report from IFPI (pdf). Contrast that with the 1.4 billion tracks that were legally bought last year, a 24 percent rise on 2007, and you have some idea of the scale of the problem faced by the music industry. Digital is growing though and represents 20 percent of the global recorded music market, up from 15 percent in 2007.

The researchers collated separate studies in 16 countries over four years to come up with that figure — but 2008’s IFPI Digital Music Report put the illegal-legal download ratio for 2007 at 20:1 so in general whilst P2P overall hasn’t increased, it hasn’t decreased either and it remains situation critical.

And the effect of all this on the UK music industry? Jupiter Research reckons online piracy has cost the industry £180 million so far, a figure set to accumulate to £1.1 billion by 2012 if nothing is done. Europe Economics puts the total jobs losses resulting from a loss in revenue in the film and music industries at 30,000.

More after the jump…

Digital growth: The UK has the third largest proportional share of digital sales, behind Japan and the US, with downloads making up 16 percent of the market. UK consumers spent an average $7.50 (£4.60) on music downloads, compared with $12.50 (£7.66) in the US. British music fans downloaded 110 million single tracks in 2008, up 42 percent on 2007. Digital album sales also saw a big lift to 10.3 million sales for the year, a 65 percent increase on 2007 — now accounting for 7.7 percent of the entire UK albums market. Worldwide, music companies globally grew digital revenue by 25 percent last year to $3.7 billion (£2.5 billion). Singles downloads across the world rose 24 percent to 1.4 billion.

Lord Carter to the rescue?: A study from Entertainment Media Research found that 72 percent of consumers would stop illegally file-sharing if asked to do so by their ISP; IFPI is co-ordinating a campaign for ISPs to play a bigger role in protecting content. That message seems to have been picked up loud and clear by the UK government: Lord Carter’s Digital Britain review out on January 26 is expected to create new rules forcing ISPs to provide music and film companies with usage data on file-sharers and to remind customers of the law.

European growth: Other parts of the continent are also experienced big growth in music downloads last year: in France sales were up 49 percent with 14.5 million singles and 1.4 million albums, while Germany’s mobile and PC singles download market increased 36 percent to be worth