IFPI publishes Digital Music Report 2007

Portable players are one of the major drivers of growth in the digital sector. New figures show that the proportion of portable player owners who source mainly from paid downloads is roughly the same as the proportion who source mainly from unauthorised P2P and free websites (14%). Yet there is still concern at the relatively low levels of digitally purchased music that is stored on devices.

There is mixed news for the industry when it comes to digital piracy. Independent research analysts Jupiter suggest that record number of high-profile lawsuits against large-scale uploaders in 2006 did have a deterrent effect on illegal file-sharers. As broadband penetration across Europe doubled to 40% between 2004 and 2006, the proportion of users regularly file-sharing fell from 18% to 14%. In the US, lawsuits were the most cited reason by computer users for changing from unauthorised P2P to legal downloading (NPD Group, June 2006).

Key successes against illegal operators were recorded in 2006; including Kazaa in Australia, Bearshare in the US, ZoekMP3 in Netherlands and Kuro in Taiwan.

Yet digital piracy is still a massive problem for the music industry and one of the major reasons that the surging legitimate digital market is not expected to make up the shortfall in the decline of the physical market in 2006.

IFPI Chairman and CEO John Kennedy said: "The record industry today has evolved into a digital thinking, digitally literate business. Revenues in 2006 doubled to about $2 billion and by 2010 we expect at least one quarter of all music sales worldwide to be digital. This is a market combining evolution and revolution, where the learning curve is changing direction on a regular basis.

"The chief winners in the rise of digital music are consumers. They have effectively been given access to 24-hour music stores with unlimited shelf space. They can consume music in new ways and formats - an iTunes download, a video on YouTube, a ringtone or a subscription library.

"Yet the market remains a challenge. Other industries, such as film and newspapers, are struggling with the same problems that we have had to live with. As an industry we are enforcing our rights decisively in the fight against piracy and this will continue. However, we should not be doing this job alone. With cooperation from ISPs we could make huge strides in tackling internet piracy globally. It is very unfortunate that it seems to need pressure from governments or even action in the courts to achieve this, but as an industry we are determined to see this campaign through to the end."

IFPI represents the recording industry worldwide, with a membership comprising some 1400 record companies in around 70 countries. IFPI's mission is to promote the value of recorded music, safeguard the rights of record producers and expand the commercial uses of recorded music in all markets where its members operate.