The International Federation of the Phonographic Industry (IFPI) has released its 2009 state of the industry report and the news is not good. On the other hand, the music industry as a whole is doing better, financially, than ever.
Among the highlights of the IFPI’s Digital Music Report 2009:
- Ninety-five percent of all Internet music downloads remain illegal
- Internet Service Providers (ISPs) are called on to cooperate on curbing illegal downloads
- Music companies are trying new Internet sales models offering consumers more choice
Interestingly, the digital music industry as a whole grew by an estimated 25 per cent last year — in spite of the collossal piracy rate.
One reason for the industry’s resurgence may be that, at the same time as piracy reached new heights, a new generation of music subscription services focused on the exploding social network scene and the cell phone market, have emerged.
“Single track downloads, up 24 per cent in 2008 to 1.4 billion units globally, continue to drive the online market, but digital albums are also growing healthily (up 36 per cent),†the Report notes.
As John Kennedy, Chairman and Chief Executive of IFPI, observed, “The recorded music industry is reinventing itself and its business models. Music companies have changed their whole approach to doing business, reshaped their operations and responded to the dramatic transformation in the way music is distributed and consumed.â€
Evolving Squid
Of course the music industry grew in the face of piracy. That\’s because piracy has a negligible effect on the industry, and what effects it does have are mostly positive.
Most people who pirate music won\’t buy music if you took away the piracy. If you waved a magic wand tomorrow and in so doing made piracy as much a social taboo as stealing candy from babies, music sales would NOT increase in a substantial way.
Some people who pirate do so as a \"try before you buy\" sort of thing where they download a song or two, then go out and buy the whole album. Wipe piracy out and these people will actually buy LESS music.
Still others download the music because they have neither the time nor technical inclination to rip music that they already own onto mix CDs for the car or whatever. What they\’re doing is not illegal at all in Canada, but is indistinguishable when looking from the ISP point of view.
Of all software vendors, Microsoft is hands-down the vendor with the most pirated software out there, and they don\’t seem to be hurting. Despite all their measures, pirates aren\’t buying more Microsoft – they\’re doing without, or finding more creative ways to pirate.
The music industry must learn: Piracy costs you almost nothing. You\’re not losing a sale because the pirate isn\’t buying in the first place.
For my part, I buy my music, but I only buy good music. Consequently, the music industry doesn\’t get much of my money these days. Who wants a CD with 19 crap songs and one good one?