The IFPI has published a new report that urgently calls for digital piracy legislation to prevent deflating music revenues.
According to the report, the internet has been responsible for a positive swing in music industry revenues because of the growth of subscription and streaming services. The IFPI said digital music revenue reached $4.3bn globally in 2009, an increase of 12 per cent on the previous year.
However the report argues industry revenue could have been a lot higher if it was not for illegal file-sharing and it praises governments that are clamping down on online piracy, including France and the UK.
"Music fans today can acquire tracks and albums in ways not conceivable a few years ago - from download stores, streaming sites, subscription services, free-to-user sites, bundled with their broadband or a mobile phone handset,” said IFPI chairman and chief executive, John Kennedy.
"It would be great to report that these innovations have been rewarded by market growth, more investment in artists, more jobs. Sadly that is not the case. Digital piracy remains a huge barrier to market growth and is causing a steady erosion of investment in local music.” he warned.
The report suggests that, while the music industry has increased its digital revenues by 940 per cent since 2004, piracy has been the major factor behind the overall global market decline of around 30 per cent during the same period.
The IFPI further said global music sales, both physical and digital sales, in the first half of 2009 were down by 12 per cent.
The IFPI is calling for laws to curb P2P file sharing and for internet service providers (ISPs) to take action when file-sharing occurs on their networks.
The UK government introduced the controversial digital economy bill at the end of last month that puts forward a “three strikes” scheme where persistent illegal file-shares will be sent warning letters before having their internet connections suspended.
Although the music industry welcomed the bill, ISPS are campaigning against its introduction because of the cost and the bill’s potential to target innocent users that have their connections’ hijacked.
“Governments, led by France, South Korea, Taiwan, the UK 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," said IFPI the report.