How the industry can fight back against pirated music

New research estimates that 28% of digital music world-wide is pirated using illegal file-sharing. The findings shed light on financial difficulties in the music industry experienced by companies such as HMV.

Recently published results from ten countries showed the level of illegal downloads ranged from 14% in Germany to 44% in Spain.

The research, carried out by academics from UWE Bristol and two universities in Spain, also analysed the financial impact on the music industry. Revenue from the total music industry has been shrinking since the start of the twenty-first century, falling from US$22 billion in 2000 to US$13 billion in 2010. The research correlates this fall both to piracy and a failure to engage music consumers.

The study used data from a number of sources, including a survey of more than 44,000 consumers in ten different countries undertaken in 2010. This survey asked around 300 questions about consumer behaviour in relation to music purchases and enjoyment.

Six of the countries were European – the UK, France, Spain, Germany, Austria and the Netherlands; the others were the US, Canada, Japan and Australia.

One of the authors of the study was Professor Glenn Parry from the Bristol Business School at UWE Bristol. He said, "Results show that non-legitimate file-sharing activity is an issue that affects all countries. The scale of activity varies from 14 per cent in Germany to 44 per cent in Spain, with an average of 28 per cent.

"We also found a strong link between levels of illegal file-sharing activity and a reduction of music industry revenue per capita of consumers."

The good news is that strong intellectual property rights (IPR) regulations that exist in some countries appear to reduce file-sharing activity.

Glenn Parry continues, "Our results support the need for policy makers to introduce stronger legislation to protect this industry. However preventing piracy through legislation is not the only response open to the music industry.

"We found that the fall in revenue is also partially due to a reduction in consumption. We identified a large percentage of people who enjoy music but have not been engaged by the digital music market. They represent an important segment of people who may come back to the market through innovative new approaches to music provision.

"New business models are being developed but the ideal recipe for a successful music business model has yet to be found. The solution may be music as a service rather than the traditional physical CD. There is a need to look more closely at customers' behaviour and to develop businesses which seamlessly meet their needs and get them passionate, engaged and buying music again. IPR policy needs to be fair and enforceable, protecting musicians and businesses who are struggling as music is illegally given away for free."