The music industry has lost a third of its value in the past seven years due to music piracy, according to the latest annual Digital Music Report.
The most recent Digital Music Report was released on Jan. 20, 2011.
While revenue from digital music has grown 1,000 percent over the last seven years, digital music sales have been slowing down, according to the report, which was published by the International Federation of the Phonographic Industry.
Digital music sale growth was at six percent in 2010, down from 9.2 percent growth in 2009. Sales on sites like iTunes account for around a third of the music industry’s total revenue.
“While record companies are innovating and licensing every viable form of music access for consumers,” said Frances Moore, the IFPI chief executive, in the IFPI Digital Music report. “The music industry is still hemorrhaging revenue as a result of digital piracy.”
Music piracy can take various forms, from downloading music illegally or manufacturing mass numbers of counterfeit compact discs.
Global music piracy is the cause of $12.5 billion of economic losses every year, according to an analysis by the Institute for Policy Innovation.
The downward trend is not just affecting the industry, but also affects artists, jobs, consumers and the creative sector, Moore said.
Students training to be professional musicians have expressed concern over the trouble facing the music industry.
“Hopefully, eventually, people will realize it’s important to support the artists and to pay for music,” said Jon Neimann, a sophomore in the College of Fine Arts. “It concerns me a little bit. As a musician, you know thriving musicians and you want the best for them and for yourself. But the fact that people don’t pay doesn’t really help, so it’s going to be a struggle.”
Neimann is a music education major who plays saxophone.
“[Music piracy] is concerning as a musician,” said Berkelee College of Music freshman Justin Lacey, who is a profession music major for voice. “At the same time, music’s been around for a long time, and it’s always going to be a part of society, something that people will pay for. The market will fluctuate but people will always listen to music.”
The industry has called for a “rule of law” on the Internet, and has been urging the government to take harsher action against those guilty of music piracy, the most recent action being the court order to shut down the file-sharing website Limewire.
In a major victory for record label companies, Limewire, the once most installed file sharing application, was ordered to end its entire operation in October of 2010.
Other companies, such as Pirate Bay, have been blocked in European nations by their respective governments.
Others think that education is also a key aspect on stopping music piracy.
The report by the IFPI also states that it hopes a wider use of subscription services will help the industry increase its revenue, although licensing issues have been hindering any real progress.
Another point touched on by the report is that governments must play a bigger role in addressing music piracy.
“Tackling digital piracy is ultimately a task for governments,” Moore said. “This is the opportunity for governments to seize in 2011.”
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