Recording industry trade body the IFPI has published a new report calling for urgent digital piracy legislation to halt the decline in music revenues.
The Digital Music Report 2010 report said that the internet has been responsible for a positive swing in music industry revenues because of the growth of subscription and streaming services. Digital music revenues reached $4.3bn (£2.6bn) globally in 2009, an increase of 12 per cent on the previous year, according to the IFPI.
However, the report argues that revenues could have been a lot higher if it was not for illegal file sharing, and praises governments that are clamping down on online piracy, including France and the UK.
"Music fans today can acquire tracks and albums in ways not conceivable a few years ago, from download stores, streaming sites, subscription services, free-to-user sites, bundled with their broadband or a mobile phone handset," said IFPI chairman and chief executive John Kennedy.
"It would be great to report that these innovations have been rewarded by market growth, more investment in artists and more jobs. Sadly, that is not the case.
"Digital piracy remains a huge barrier to market growth, and is causing a steady erosion of investment in local music."
The report suggests that, while the music industry has increased its digital revenues by 940 per cent since 2004, piracy has been the major factor behind the overall global market decline of around 30 per cent during the same period.
The IFPI also said that global music sales in the first half of 2009, both physical and digital, were down by 12 per cent.
The organisation is calling for laws to curb P2P file sharing, and for internet service providers (ISPs) to take action when file sharing occurs on their networks.
The UK government introduced the controversial Digital Economy Bill at the end of last month that puts forward a 'three strikes' scheme where persistent illegal file sharers will be sent warning letters before having their internet connections suspended.
The music industry welcomed the Bill, but ISPs are campaigning against its introduction because of the cost and its potential to target innocent users who may have had their connections hijacked.
"Governments led by France, South Korea, Taiwan, the UK and New Zealand led the way in 2009 by adopting or proposing legislation to tackle piracy," said the IFPI report.
"It is vital that these efforts are seen through to their conclusion, and followed by other governments in 2010."
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