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IFPI Digital Music Report2010
Music how, when, where you want it
 
Contents
 3.Introduction 4.Executive Summary: Music – Pathnder In The Creative Industries’ Revolution8.The Diversication O Business Models 10.Digital Music Sales Around The World12.In Prole: Pioneers O Digital Music 18.Competing In A Rigged Market – The Problem O Illegal File-Sharing20.‘Climate Change’ For All Creative Industries 24.Graduated Response – A Proportionate, Preventative Solution 28.The World O Legal Music Services30.Consumer Education – Lessons Learned
 
This is the seventh IFPI Digital MusicReport. I you compare it to the rstreport published in 2004, you cansee a transormation in a businesswhich has worked with the advanceo technology, listened to the consumerand responded by licensing its musicin new ormats and channels.In 2009 globally, or the rst time, morethan one quarter o record companies’revenues came rom digital channels.Fans can acquire tracks and albumsin ways inconceivable a ew yearsago – rom download stores, streamingsites, subscription services, ree-to-usersites, bundled with their broadband or amobile phone handset.It would be great to report theseinnovations have been rewarded bymarket growth, more investment in artists,more jobs. Sadly that is not the case.Digital piracy remains a huge barrier tomarket growth. The slump in sales andinvestment in three major music marketsoutlined in the Report testiy to this andare a warning to the rest o the world.On the positive side, we have built aUS$4.2 billion digital business ull oconsumer-riendly services. On thenegative side, our global sales ell byaround 30 per cent rom 2004 to 2009,the growth o our digital sales is slowingand even the success stories reportedin this publication will struggle to surviveunless we address the undamentalproblem o piracy.Some ask, ‘why not give up the ght?’The answer is straightorward – rst, wecannot aord to. To continue to investin new artists, we have to tackle masspiracy. Second, we are progressing towardsan eective response. The progress isagonisingly slow or an industry which doesnot have a lot o time to play with – but it isprogress nonetheless.On page 20 o the Report, StephenGarrett, head o the production companyKudos, reers to a “climate change” inthe creative industries. That expressioncaptures the way the debate over digitalpiracy has evolved. You hear it aroundthe world: this is no longer just a problemor music, it is a problem or the creativeindustries: aecting lm, TV, books andgames. In this arena, the music industryis the pathnder o the creative industries,pioneering with new oerings or theconsumer. In 2009, Rupert Murdochsaid that the content kleptomaniacsshould not triumph and Microsot spokeout against piracy, ready to ban playersrom Xbox live i they had modied theirconsoles to play pirated discs – no threestrikes procedure needed!The thinking behind the debate hasalso crucially changed. It is about theuture o a broad base o creative industriesthat have huge economic importanceand employ vast numbers o people.This is one o the reasons why the French,UK and other governments are set onlegislation to curb illegal le-sharing.Another clear change is within the musicsector itsel. It was, until recently, rareor artists to engage in a public debateabout piracy or admit it damages them.In September 2009, the mood changed.Lily Allen spoke out about the impact oillegal le-sharing on young artists’ careers.When she was attacked by an abusiveonline mob, others came to her support.The mood o change is clearly reachinggovernments. In 2009, legislationrequiring ISPs to tackle P2P piracy wasadopted in France, South Korea andTaiwan. These countries established inlaw that it is appropriate or those whopersistently violate copyright, despiterepeated warnings, to ace a proportionateand eective sanction. This sets atremendous precedent in the protectiono intellectual property rights online. Inthe UK, as in France, it is understood thatgovernment has a key role in protectingcontent on the internet. Even in the mostcompetitive, innovative and market-drivenindustries, the market itsel can onlyoperate under the eective rule o law.This Report points the way to an optimisticuture or the music industry – greatoerings or consumers, more investmentin artists, economic growth and more jobs.Yet we are nowhere near that uture today,and we will not get there without a securelegal environment where creative work isrewarded and copyright thet is eectivelydeterred. To unlock the enormouspotential o digital music, we have toaddress piracy both on P2P networksand in other orms. That is where, today,we look to governments or action.
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Music How, When, WhereYou Want It – But NotWithout Addressing Piracy
By John Kennedy, Chairman & Chie Executive, IFPI
3
“To continue to invest innew artists, we have to tacklemass piracy.”
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