IFPI: time for ISPs to pull their digitals out...

Ben Challis (Music Law Updates) has tipped the IPKat off that IFPI has published its Digital Music Report 2008. The press release leads with the slogan “2007 was the year ISP responsibility started to become an accepted principle. 2008 must be the year it becomes reality”.

Right: once upon a time, digital music meant THIS

The press release continues, in relevant part:

"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 ....

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. [says the IPKat, no-one can seriously accuse the recording industry of trying to cling to existing business models now, surely?]

Yet the spread of unlicensed music on ISP networks is choking revenues to record companies and investment in artists [the IPKat wonders whether artists are not themselves becoming more robust in their self-promotion, now that recording companies are becoming more penny-prudent in their budgeting], 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. [the IPKat's surprised that systematic disconnection is put first on this little list, when--particularly with continued convergence of technologies--it's so easy to get around] 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.

...

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.

Left: paws for thought

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.

Highlights include:

· The first-ever global music download sales chart is topped by Avril Lavigne, who sold 7.3 million track downloads of her song ‘Girlfriend’ across the world in 2007

· Global digital music sales are estimated at approximately US$2.9 billion in 2007, a roughly 40% increase on 2006 (US$2.1 billion)

· Single track downloads, the most popular digital music format, grew by 53% to 1.7 billion (including those on digital albums)

· Digital sales now account for an estimated 15% of the global music market, up from 11% in 2006 and zero in 2003. In the world’s biggest digital music market, the US, online and mobile sales now account for 30% of all revenues

· The music industry is more advanced in terms of digital revenues than any other creative or entertainment industry except games. Its digital share is more than twice that of newspapers (7%), films (3%) and books (2%)

· There are more than 500 legitimate digital music services worldwide, offering over 6 million tracks – over four times the stock of a music megastore

· Tens of billions of illegal files were swapped in 2007. The ratio of unlicensed tracks downloaded to legal tracks sold is about 20 to 1

· Progress in the digital music market is being hampered by lack of interoperability between services and devices, and lack of investment in marketing of new services [does the lack of interoperability also hamper infringements, the Kat ponders]

· The growth rate of around 40% in digital sales did not offset the sharp fall in CD sales globally, meaning that the overall market for the year will be down on 2006 [says the IPKat, there must be plenty of people around who, having invested their savings in a handsome new mp3, have run out of hard cash to buy new CDs and are thus condemned to spend a year in penury, ripping and burning their existing stock]

· Research by IFPI debunks a myth about illegal P2P services: in fact, fans get better choice on legal sites. IFPI conducted research with a sample of 70 acts on the legal site iTunes and on the copyright infringing service Limewire. In 95 per cent of searches the artists requested had more songs available on iTunes than on the leading P2P service [the IPKat is as surprised as anyone else who has believed the contrary, and wonders what the explanation is]".

Also available: the full report, a summary of the full report and a summary of the quotable bits.