Pirates Outstrip Legal Downloads

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The music business is having problems. That’s hardly news. But a new report from the International Federation of the Phonographic Industry (IFPI) pulls no punches to show the current state of play.

The organization, which represents 1,400 different companies across 72 countries, said music business revenues shrank by 7% in 2008. That’s in spite of an increase in 25% of legal downloading to a total of 1.8 billion tracks – indeed, downloading is now responsible for 25% of all music sales, and worth $3.8 billion.

However, the IFPI estimates that the pirates won, hands down, as 40 billion music tracks were illegally shared during the year.

John Kennedy, chairman and chief executive of IFPI, said:

"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."

"There is a momentous debate going on about the environment on which our business, and all the people working in it, depends. Governments are beginning to accept that, in the debate over "free content" and engaging ISPs in protecting intellectual property rights, doing nothing is not an option if there is to be a future for commercial digital content."