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Online Legal Downloading rises 10 fold
January 01, 2005

Online legal downloads have risen tenfold in the past year'

Owen Gibson, media correspondent
Thursday January 20, 2005
The Guardian

The music industry yesterday claimed that it was winning its global battle against online piracy as it revealed figures showing that legal downloads had risen tenfold during the past year.
Trade body the International Federation of the Phonographic Industry, said that music fans in the United States and Europe downloaded more than 200m tracks during 2004, up from about 20m over the previous year.

The digital music industry is now worth £177m in Europe, a figure expected to double this year. Some record companies estimate that the digital market could be worth 25% of total sales by 2009, compared with the present 1.5%.

After being caught out in the late 1990s by the rapid rise in online piracy, record executives said the tide had turned during the last year through a combination of legal action against pirates and the widespread availability of around a million tracks through legal services such as Napster and Apple's iTunes Music Store.

Barney Wragg, vice-president of the eLabs division at Universal Music, said that in the coming year labels would come up with new ways of marketing digital music online, such as releasing songs exclusively on the web, and start to exploit their back catalogue of deleted albums. The biggest selling single over the internet last year was Vertigo by U2. The majority of existing CD catalogues released by the major labels, with the notable exception of The Beatles, is now also available online.

The number of websites offering legal music around the world has also mushroomed in the past year, more than quadrupling to around 230. Apple's iTunes, buoyed by the success of its digital music player the iPod, remains by far the most popular way of legally buying music online. In the largest market, the US, the Californian company has a 70% market share.

"At long last the threat has become the opportunity," said IFPI chairman and chief executive John Kennedy, and pointed to new research showing that for the first time as many people were downloading music legally as were copying it for nothing.

An IFPI survey showed that 44% of people who down loaded music now did so legally, while the same proportion continued to use illegal services. The number of illegal files downloaded fell by 30m to 870m.

But Mr Kennedy said that the industry would keep up the legal pressure, both on individual file sharers and the companies behind the peer to peer software, which allow users to swap pirated tracks.

Trade bodies around the world sued 7,000 people during 2004, including the first cases brought in the UK. "There is more litigation to come in more countries in 2005. It's necessary and while it's not always popular, we have to carry on," said Mr Kennedy.

A crucial test case against file-sharing service Kazaa in Australia concluded at the end of last year with a decision expected in April. An application against a similar operation, Grokster, will be considered by the US supreme court next month. Record companies are also planning to step up their campaign to persuaded Apple and Microsoft to come to an agreement over their competing standards for downloads.

At present, owners of Apple's iTunes can only download songs from the company's own online music store. Microsoft's technology, used by most other download sites including Napster, works with a range of players manufactured by Apple's rivals but not with the market-leading iPod. Mr Wragg said the labels were doing "everything they could" to encourage interoperability between the sites.


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