Professional Documents
Culture Documents
This is the seventh IFPI Digital Music in new artists, we have to tackle mass legislation to curb illegal file-sharing.
Report. If you compare it to the first piracy. Second, we are progressing towards Another clear change is within the music
report published in 2004, you can an effective response. The progress is sector itself. It was, until recently, rare
see a transformation in a business agonisingly slow for an industry which does for artists to engage in a public debate
which has worked with the advance not have a lot of time to play with – but it is about piracy or admit it damages them.
of technology, listened to the consumer progress nonetheless. In September 2009, the mood changed.
and responded by licensing its music Lily Allen spoke out about the impact of
in new formats and channels. On page 20 of the Report, Stephen illegal file-sharing on young artists’ careers.
Garrett, head of the production company When she was attacked by an abusive
In 2009 globally, for the first time, more Kudos, refers to a “climate change” in online mob, others came to her support.
than one quarter of record companies’ the creative industries. That expression
revenues came from digital channels. The mood of change is clearly reaching
Fans can acquire tracks and albums governments. In 2009, legislation
in ways inconceivable a few years “To continue to invest in requiring ISPs to tackle P2P piracy was
ago – from download stores, streaming adopted in France, South Korea and
sites, subscription services, free-to-user new artists, we have to tackle Taiwan. These countries established in
sites, bundled with their broadband or a mass piracy.” law that it is appropriate for those who
mobile phone handset. persistently violate copyright, despite
repeated warnings, to face a proportionate
It would be great to report these captures the way the debate over digital and effective sanction. This sets a
innovations have been rewarded by piracy has evolved. You hear it around tremendous precedent in the protection
market growth, more investment in artists, the world: this is no longer just a problem of intellectual property rights online. In
more jobs. Sadly that is not the case. for music, it is a problem for the creative the UK, as in France, it is understood that
Digital piracy remains a huge barrier to industries: affecting film, TV, books and government has a key role in protecting
market growth. The slump in sales and games. In this arena, the music industry content on the internet. Even in the most
investment in three major music markets is the pathfinder of the creative industries, competitive, innovative and market-driven
outlined in the Report testify to this and pioneering with new offerings for the industries, the market itself can only
are a warning to the rest of the world. consumer. In 2009, Rupert Murdoch operate under the effective rule of law.
On the positive side, we have built a said that the content kleptomaniacs
US$4.2 billion digital business full of should not triumph and Microsoft spoke This Report points the way to an optimistic
consumer-friendly services. On the out against piracy, ready to ban players future for the music industry – great
negative side, our global sales fell by from Xbox live if they had modified their offerings for consumers, more investment
around 30 per cent from 2004 to 2009, consoles to play pirated discs – no three in artists, economic growth and more jobs.
the growth of our digital sales is slowing strikes procedure needed! Yet we are nowhere near that future today,
and even the success stories reported and we will not get there without a secure
in this publication will struggle to survive The thinking behind the debate has legal environment where creative work is
unless we address the fundamental also crucially changed. It is about the rewarded and copyright theft is effectively
problem of piracy. future of a broad base of creative industries deterred. To unlock the enormous
that have huge economic importance potential of digital music, we have to
Some ask, ‘why not give up the fight?’ and employ vast numbers of people. address piracy both on P2P networks
The answer is straightforward – first, we This is one of the reasons why the French, and in other forms. That is where, today,
cannot afford to. To continue to invest UK and other governments are set on we look to governments for action. n
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Digital Music Report 2010
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Executive Summary
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Digital Music Report 2010
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Executive Summary
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Digital Music Report 2010
“We are shaping our own future by finding new ways of getting music
into people’s lives.”
Lucian Grainge, Chairman and CEO, Universal Music Group International
Music companies have expanded their TDC’s PLAY service was the first
licensing of DRM-free à-la-carte services ISP music service to
internationally. Fans can now transfer launch. Today it offers
their purchased music files to different TDC’s broadband, mobile
portable players when they buy from and cable customers in
virtually any online service. Digital album Denmark unlimited music
sales grew faster than single track streaming from a catalogue
purchases in many markets. Variable of 6.1 million tracks at no
pricing, by which catalogue music is additional cost. TDC’s online customer Vodafone for example is active in more
discounted relative to new top charting churn was reduced by 50 per cent, for than 20 countries, offering both à-la-carte
tracks, helps increase the conversion of those who used TDC Play. and unlimited subscription services. In
track purchases into album sales. April 2009 Vodafone Spain launched
In the UK, home entertainment company an unlimited music subscription service
The launch of iTunes LP – a deluxe digital Sky launched Sky Songs in October bundled with an overall mobile service
format – boosted demand for premium 2009 offering consumers unlimited which attracted more than 100,000 users
albums which account, on average, for 65- streaming of more than four million tracks shortly after launch.
70 per cent of the sales of a major digital with packages of 10-15 downloads per
album release. Artists from Bob Dylan to month. This new offering is powered by Music subscriptions bundled
Jay-Z are engaging fans in this new way. music service Omnifone. with devices
Premium album downloads often outsell Mobile handset manufacturers Nokia
regular versions. During the first week of In Brazil, Terra Networks, part of and SonyEricsson started offering
sales through iTunes in Europe, the deluxe the Telefonica Group, launched Sonora unlimited music services bundled with
version of Michael Bublé’s Crazy Love out- in 2006. The service offers unlimited mobile phones in 2008. The global
sold the standard version by a ratio of 3:1. music streaming through a “tethered” reach of these players brings enormous
subscription service with a fee bundled opportunities. Nokia is the biggest
ISP and mobile partnerships into the ISP bill. In February 2009 Sonora mobile device manufacturer in the
Internet service providers (ISPs) launched a new service tier – 20 hours world selling more than 450 million
are increasingly looking to become of music streams per month, free-to- phones every year.
commercial partners of music consumer on an ad-supported basis.
companies. They can add value to The new offer attracted more than three Nokia’s Comes With Music (CWM)
the ISPs’ offers at a time when their million users in less than one year. Mobile expanded widely into international markets
traditional broadband market is close operators also increasingly offer added- in 2009, launching in 11 countries.
to saturation in many markets and value content. The service has enjoyed particular
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The Diversification Of Business Models
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Lady Gaga Jason Mraz
10
Taylor Swift
Beyoncé
In Asia, around a quarter of the music A study by Jupiter Research in March Globally, single tracks crossed the
business is now composed of digital 2009 highlighted some reasons for 1.5 billion mark for the first time,
revenues, set against a backdrop of Europe’s digital lag: up an estimated 10 per cent on 2008.
sharply falling physical sales (IFPI). Digital albums grew an estimated
Digital sales in China, Indonesia, n The impact of music piracy – there 20 per cent, double the rate of single
South Korea and Thailand now are 29.8 million frequent users of tracks. Today, around 20 per cent
account for more than half of all file-sharing services in the top five of albums sold in the US are digital
music sales. South Korea has seen EU markets alone and other forms of and around 15 per cent in the UK
the benefits of a stronger copyright piracy are growing. Trends indicate a (RIAA, BPI).
environment and there has been north-south divide, with Italy and Spain
strong growth in MP3 subscription showing considerably higher piracy The best selling single track of 2009
services (see page 26). Japan, the levels. Paid digital music services have a was Lady Gaga’s Poker Face, selling a
biggest market in the region, was fundamental problem in competing with total of 9.8 million units. By comparison,
hit by mobile piracy and economic widespread illegal downloading. the best-selling digital single track
downturn, seeing CD sales fall by in 2008, Lil Wayne’s Lollipop, sold
more than 20 per cent in the first n Europe’s higher taxation levels compared 9.1 million units and in 2007 Avril
half of 2009, while digital sales to the US, different royalty structures and Lavigne’s Girlfriend sold 7.3 million
were flat. a fragmented rights landscape makes units (IFPI).
pan-European licensing a resource-
Strong downloading demand helped intensive and complicated process. Global mobile music revenues fell in
Australia become one of the few 2009, hit by piracy, lack of operator
developed music markets to achieve the n High-street retail consolidation started support for music services in some
“holy grail” of overall growth in the first earlier in the US. This drove active markets and saturation of the
half of 2009, as the rise in digital music music fans online earlier, both to mastertones sector. On the other
sales offset a small decline in revenues online CD retailers such as Amazon hand, single track mobile downloads
from physical formats. Digital album as well as digital stores. were stable and ringback tones
sales nearly doubled in the first half of continued to grow thanks to strong
2009, representing almost 8 per cent of n The $0.99 à-la-carte model has been sales in the US, Japan and India.
overall album sales, and digital albums better suited to the US compared to the
are proving especially popular in the fragmented European market given the Music subscriptions continued, and
early days after a title’s release (ARIA). comparatively low margins, which favour are expected to grow, account for
Some local artist releases, for example large players and economies of scale. more than 5 per cent of digital sales
those by Australian artists Eskimo Joe, in 2009 (IFPI). Services such as
Hilltop Hoods and Paul Dempsey, saw Latin America closely follows Europe TDC PLAY, Nokia Comes With Music,
digital album sales of between 15 and in terms of digital share, with nearly Spotify Premium and Vodafone drove
20 per cent of total first week sales. 15 per cent of revenues coming from this growth. Despite still accounting
digital channels. Brazil is the biggest for a modest share of overall digital
Europe continues to lag behind in digital market in the region and saw revenues, advertising-supported
digital adoption, with only around the successful development of services revenues are also expected to
15 per cent of sales coming from including Nokia Comes With Music and show strong growth in 2009. n
digital channels. In 2009 however, Terra Sonora in 2009. Mexico saw the
Europe was the fastest growing region introduction of the iTunes store in August
in terms of digital sales. 2009 – the first in the region.
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Digital Music Report 2010
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In Profile: Pioneers Of Digital Music
Replacing Piracy
With Partnership
Jonathan Benassaya, CEO of Deezer
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Digital Music Report 2010
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In Profile: Pioneers Of Digital Music
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Digital Music Report 2010
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In Profile: Pioneers Of Digital Music
Top100.cn is
A Legitimate Foothold licensed by
the majors
In China and 10,000
Gary Chen, CEO Of Top100.cn independent
labels to make
China’s digital music landscape remains dominated four million
by mass-scale copyright infringer Baidu and other tracks available.
“deep link” infringing distributors. However, a very The company
small legitimate sector is battling to gain a foothold. currently
Top100.cn is the streaming and downloading service facilitates five
behind the Google music search in China, launched million music
in March 2009. The company aims its service at streams and downloads daily.
the 217 million online users in China that stream or
download music illegally. “We are the first licensed “It is a labour intensive task to add extra tracks
service to really exploit this user base and take on the to the service. We have 60 full-time and 30 part-
pirate services.” time staff working on this. We have to wait for
clearance to use tracks and only distribute them
Gary Chen thinks he can take on pirate when they are officially released. Pirate services
services by offering a better user experience. do not operate under those restrictions.”
“We provide access to music for free in just two
clicks, compared with the three clicks it takes on The service places cost-per-click advertising and
unlicensed sites. We offer 100,000 Chinese tracks targets international brands that want to reach
alone, representing virtually all the local repertoire younger consumers in China, now the world’s
ever digitised and licensed.” second largest advertising market. n
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Digital Music Report 2010
Piracy – The impact on sales relationship between file-sharing and sales increased their file-sharing activity
Music companies and legitimate music of sound recordings.” Research from in 2008 did so “because it’s free”.
services are trying to build their online Harris Interactive in 2009 among 3,400 In Norway, research by Norstat in 2009
business in a rigged market deluged by online consumers aged 16-54 in the also found the most cited reason for
unauthorised free content. The growth UK highlighted that nearly one in four illegal downloading from P2P
of illegal file-sharing has been a major P2P file-sharers (24%) typically spend services was “because it’s free”.
factor in the decline in legitimate music nothing on music, while also finding an Further studies came to broadly
sales over the last decade, with global overlap of legal and illegal downloading the same conclusion in Japan
industry revenues down around 30 per among some file-sharers. and Belgium in 2009 (IFPI).
cent from 2004 to 2009. In virtually
every country of the world, spending on Jupiter Research study in five
A
recorded music has fallen since illegal European countries among 5,000
file-sharing became widespread. internet users aged 15 and over in 2009
found that, although there is an overlap
All but a few of the independent surveys between the habits of online music
confirm that the net impact of illegal buyers and file-sharers, most illegal file-
file-sharing is to reduce spending on sharers “do not buy music and are nearly
legitimate music. Most academic studies half as likely as music buyers to buy CDs
exploring the dramatic fall in sales in a high street shop or from an online
of recorded music conclude that the store.” The study also finds that the net
damage caused by illegal file-sharing effect of illegal file-sharing is negative.
is a major factor in the decline. “Although it is possible that file-sharing
functions as some sort of discovery tool
These include Norbert Michael (The for those digital music buyers that also
Impact of Digital File-Sharing on the file-share, it is reasonable to assume that
Music Industry: An Empirical Analysis, their spend would be higher if they were
2006), Rob & Waldfogel (Piracy on the not file-sharing. The overall impact of file
High C’s, 2006) and Alejandro Zenter sharing on music spending is negative.”
(Measuring the Effect of File Sharing
on Music Purchases, 2003). The lure of free
A separate body of research helps
2006 study by Professor Stan Liebowitz,
A explain why illegal file-sharing is having
File-Sharing: Creative Destruction this impact on consumer behaviour,
or Just Plain Destruction? concludes: confirming the main driver of piracy to
“The papers that have examined the be not better choice or quality, but the
impact of file-sharing can be categorised “lure of free”. Researchers GFK found
by result and by methodology. By results that “because it’s free” was the main
the classification is quite simple. There is answer given among over 400 illegal file-
one study (Oberholzer and Strumpf, 2004) sharers in research unveiled in Sweden
that claims to find a zero impact but it in July 2009. A study by Entertainment
has been frequently discredited. All the Media Research in the UK found that
other studies find some degree of negative 71 per cent of those who admitted they
18
Competing In A Rigged Market
1 in 4:
file-sharing that creates its unfair of its size in 2001 and fell by
advantage over legitimate music around 17 per cent in 2009 alone.
services, whose cost base, including Local artist album sales in the
payments to artists and copyright P2P file-sharers Top 50 declined by 65 per cent
holders, cannot compete with the free typically spend between 2004 and 2009.
illegal alternative. This, more than any
other factor, explains why the growth nothing on music n In Brazil, music sales fell by more
of an innovative and entrepreneurial than 40 per cent between 2005 and
legitimate music sector is being stunted 2009, with a disastrous impact
in the absence of an effective response on investment in local repertoire.
to digital piracy. In 2008 there were only 67 full
Live performance earnings are priced local artist album releases
The impact on local talent generally more to the benefit of by the five biggest music companies
Illegal file-sharing has also had a very veteran, established acts, while in Brazil – just one tenth of the
significant, and sometimes disastrous, it is the younger developing acts, number (625) a decade earlier.
impact on investment in artists and local without lucrative live careers, who This has been particularly
repertoire. With their revenues eroded by do not have the chance to develop damaging in a market where
piracy, music companies have their reputation through recorded 70 per cent of music consumed
far less to plough back into music sales. is domestic repertoire.
local artist development. Much
has been made of the idea that Clear evidence of this impact can New forms of piracy emerge
growing live music revenues be seen in markets including France, Although P2P file-sharing remains the
can compensate for the fall-off Spain and Brazil. most damaging form of piracy due to
in recorded music sales, but the volume of files shared by users,
this is, in reality, a myth. n In France, there has been a striking the last two years have seen a sharp
fall in the number of local repertoire rise in non-P2P piracy, such as
albums released in recent years. downloading from hosting sites,
In the first half of 2009, 107 French- mobile piracy, stream ripping, instant
repertoire albums were released, message sharing and downloading
60 per cent down on the 271 from forums and blogs.
in the same period of 2003.
French artist signings have also According to a study by Jupiter
slumped by 60 per cent, from Research in 2009, about one in
91 in the first half of 2002 to 35 five people across Europe’s top
in the same period of 2009. markets (21%) are engaged in
Overall investment in marketing frequent unauthorised music-sharing.
and promotion by the French music P2P piracy is still the biggest single
industry fell nine per cent in the first source of this, with around two-thirds
six months of 2009. It is estimated of music sharers file-swapping on
that 25 per cent of the French internet P2P networks despite the increase
population currently download music in non-network file-sharing.
illegally from P2P networks or other
sources on a monthly basis (Jupiter Research by Harris Interactive in
Research, 2009). the UK shows that, although P2P
piracy is the single biggest problem
n In Spain, a culture of state-tolerated and did not diminish in 2009, the
apathy towards illegal file-sharing illegal distribution of infringing music
has contributed to a dramatic slump through non-P2P channels is growing
in the music market. Spain has the considerably. The research showed the
worst online piracy problem of any biggest increases in usage for overseas
major market in Europe. Today, P2P unlicensed MP3 pay sites (47%) and
usage in Spain, at 32 per cent of newsgroups (42%). Other significant
internet users, is more than double rises included MP3 search engines
* By
the five the European rate of 15 per cent (28%) and forum, blog and board
biggest music (Jupiter Research, 2009). links to cyberlockers (18%). n
companies
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Digital Music Report 2010
“We are in danger of creating a world where nothing appears to have any value at all,
and the things that we make...will become scarce or disappearing commodities.”
Stephen Garrett, Chief Executive, Kudos
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‘Climate Change’ For All Creative Industries
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Digital Music Report 2010
22
‘Climate Change’ For All Creative Industries
From The
in 10 years and sold records in 30
countries between 1999 and 2009.
“The Crash was an appropriate name,”
Coal Face says Brunila ruefully “as we lived
through the great crash of the music
business.” Some critics may suggest
The Indie Label that the band should not have suffered
Keith Armstrong is the co-founder as increasing live revenues would have
of Kitchenware Records, based in offset falling record sales, but Brunila
the northern UK city of Newcastle. dismisses that view. “90 per cent of our
Kitchenware is a development label, yearly income as a band came from
often signing artists at the very copyright channels, not live, despite the
beginning of their career. band touring 20 countries. Make no
mistake, in a world with no copyright
“When we were starting out back “We live in a world where protection, freedom of information will
in the early 80s,” recalls Armstrong €1 is considered extravagant become freedom from information
“there was a campaign running because no one will do a damn thing
called ‘Home taping is killing music’. for a music download.” creatively. Song writing would cease to
Our slogan was ‘Home taping broadens Teemu Brunila, singer-songwriter be a profession.”
minds’. But illegal file-sharing is in
a completely different league and is have done really well in the dance He cites an example. “One year the
devaluing and cheapening the way charts, but I’ve seen online that there band played Valmiera, the biggest
people perceive music.” have been 15,000 illegal downloads of music festival in Latvia. We drove in
their next single that hasn’t even begun from the airport and heard our songs
Armstrong says that for many of to play on the radio yet and won’t be on the radio. We headlined the festival
his acts, the revenue coming in from released until next year. Not every one and the 10,000-strong crowd roared
their first sales is essential to help of those downloads was probably a lost out our songs. When we came off stage
them sustain their career. “That revenue sale, but even one in three of them I asked our label representative how
is recycled straight away into building would have bought the girls some vitally many records we had sold in Latvia. The
their profile and taking them to the needed tour support.” answer was like a slap in the face. 200.”
next level, but it is disappearing.”
Armstrong says: “I used to work in HMV, As he now concentrates on song
He cites Editors as an example of an and if someone came in and started to writing, Brunila is aware that many
act that has proved highly successful steal records we’d chase them down the in his profession have been badly
in the UK and Europe and seems street. Uploaders are doing essentially squeezed by falling music sales.
popular in the US but is unable to the same thing as those shoplifters. My “The average songwriter in Finland earns
establish sales there. “The guys regularly artists are being hit. Editors and Sirens €1,600 a year before tax, discounting
sell out plenty of four thousand seat both backed Lily Allen when she took a performance fees. Just 200 songwriters
venues on both coasts, but their albums stand for new artists last year and said earn more than €20,000 a year. That has
only sell 50,000 copies. They seem at this had to stop.” come about because we live in a world
the mercy of the piracy culture.” where €1 is considered extravagant
The Artist-Songwriter for a music download, but a couple of
Sirens, an all-girl dance act, have a very Teemu Brunila is a Grammy Award- euro is considered reasonable for
different profile, but suffer from the winning singer-songwriter from Finland a Starbucks coffee.” n
same problem. “We’ve promoted them and former lead vocalist of The Crash,
in the dance clubs and their first singles
Under this system, the holders of n Research conducted for the New
accounts identified by rights holders Zealand Federation Against Copyright
as being used for infringement are Theft (NZFACT) in 2008 found that
sent notices by their ISP. The notice 70 per cent of internet users in the
would advise them to stop infringing country aged between 15 and 30
and suggest the use of a legitimate would stop file-sharing copyright
service that respects copyright and infringing movies if their ISP could
rewards rights holders. An escalating suspend or terminate their internet
series of warnings would result, as account for breaking the law.
a last resort, in temporary internet
account suspension for those few n A study by Harris Research in the
who refuse to stop. The system would UK in 2009 found that merely being
protect the anonymity of individuals familiar with copyright law alone is
and would essentially implement not a deterrent to illegal file-sharing.
the standard terms of ISP subscriber The study suggested 23 per cent
agreements, while conditioning of the general population in the UK
continued service upon compliance illegally file-shares infringing music,
with the law, particularly copyright. while 33 per cent of those “very
familiar” with the law illegally file-
Consumer surveys in different share music.
countries show that the graduated
response would effectively influence Progress With Graduated
consumer behaviour while affecting Response Around The World
only a small minority of people. Graduated response legislation
arrived on the statute books in 2009
n IPSOS research, conducted in France with France, South Korea and
in May 2008, found that 90 per cent Taiwan passing laws that turned
of consumers would stop illegally the concept into reality. Other
file-sharing on receipt of a second governments, such as the UK and
warning from their ISP as part of a New Zealand, are proceeding with
graduated response programme. the introduction of legislation.
24
Graduated Response
The government of France was an Given the development in a number repeat infringers. In New Zealand,
early champion of graduated response of EU Member States of legislation to the government has concluded its
legislation, understanding it as an effective tackle file-sharing and other forms of consultation on legislation to introduce
way to protect the creativity of French piracy, the European Commission is graduated response and is expected to
artists and local culture. considering whether to table framework present a bill to Parliament early in 2010.
laws in order to provide guidance to the
France’s legislation was member states. One option would be A different path to graduated
enacted in October, for the Commission to come forward in response has been taken in Ireland.
establishing a new 2010 with proposals to strengthen the The country’s largest ISP, Eircom,
administrative authority EU Enforcement Directive. agreed to introduce such a system
(HADOPI) that will in a settlement with the local
require ISPs to send In Asia, South Korea and Taiwan recording industry.
warning notices to online have passed legislation establishing
copyright infringers. graduated response processes for There are government sponsored
After a second warning, repeat infringement that can culminate discussions taking place between
HADOPI will transfer the in account termination. ISPs and content industries in many
files of repeat infringers countries. In Germany, the Ministry
to the criminal courts, Legislation to tackle online copyright of Economy is sponsoring meetings
where a judge will be infringement was also announced in to include discussions on graduated
empowered to order the November in the UK, following the response, new business models and
suspension of infringers’ government’s Digital Britain consultation. education. Other countries involved in
internet access for up The proposal establishes a graduated similar discussions include Australia,
to one year, as well as response leading to possible sanctions Brazil, Hong Kong and Japan –
to impose a full range of that could include suspension of repeat all of which are closely monitoring
criminal penalties. infringers’ accounts. ISPs would notify developments elsewhere.
subscribers whose accounts have been
The graduated response reported to be infringing, and keep In some countries, notably the US,
system is expected to records on an anonymous basis. private deals have been struck
start functioning in early between some individual rights
2010, as soon as some The government could then oblige holders and ISPs that incorporate a
implementing decrees ISPs to implement technical measures commitment by the ISP to put in place
have been adopted. or temporary account suspension for a system of graduated response. n
Jeremy Banks, IFPI’s director of anti-piracy, heads the new One of the most high-profile pre-release leaks of 2009
combined team. He says: “Record labels are more aware was the posting of Leona Lewis tracks online following
than ever that the protective measures they take in the days a ‘hack’ of an internet account at her record company.
around an album’s release are absolutely crucial to whether Simon Cowell, the managing director of Syco Records,
the album will realise its full market potential. You can count called in the police and industry investigators who
the cost in terms of lost returns to artist and record company traced the origins of the ‘hack’ and the leak to sources
from the moment the first copy leaks out on to the internet.” in North America and Europe. n
25
South Korea – Legislative Change Combined
With New Services Helps Boost Sales
South Korea is an example of a country South Korea’s copyright landscape the introduction of the law appears to
where improvements to the legal started improving in 2007 after two have had a significant deterrent effect.
environment, combined with a range major infringing services, Soribada Preliminary research by the South Korean
of legitimate offerings, appear to have and Bugs, which had been subject to government suggests consumers are
contributed to a marked increase in legal actions, turned legitimate. Also in aware of and are being influenced by the
legitimate music sales and revived 2007, South Korea became one of the new law. In an indicative survey based on
investment in local music. 1,000 interviews, 45 per cent said they
were illegally downloading less content.
Digital music came to South Korea very
early in the decade, with digital sales
local Helped by this improved environment,
overtaking sales of physical formats repertoire: South Korea’s legitimate music services
as early as 2006. In the early stages, and physical retailers are seeing
however, legitimate digital services were Record companies encouraging revenue growth. At the
hit by high rates of piracy which also report increasing same time, record companies report
accounted for falling CD sales. increasing investment in local repertoire
investment which has further boosted the market.
However, since 2007, South Korea
has seen a steady recovery against Alongside the action taken by the
the backdrop of a series of legislative first countries in the world to require government, 2008 was also the year
changes and legal actions that have P2P file-sharing operators to take that legal unlimited MP3 subscription
significantly strengthened the protection measures to block illegal distribution of services offering a wide range of
of music rights holders in the country. copyrighted works on request from right domestic and international repertoire
In the first half of 2009, the government holders. In 2008, a new government took off. Today, major players like
began to publicise its new graduated tabled legislation allowing authorities to Soribada and M.Net Media, all offer
response law, which became effective order ISPs to warn infringing users and unlimited MP3 subscription services.
in July, and music sales increased suspend accounts after three warnings.
by 18 per cent, with digital sales up Authorities were also given the power Consumer take-up of these services
by 32 per cent in the same period to suspend infringing message boards, has been robust. Soribada now has
in 2008. Digital sales grew by 53 per blogs and forums following warnings. 300,000 paying subscribers, compared
cent in the first nine months of 2009. to 700,000 subscribers in its previous
CD sales also rose in 2009 for the The new graduated response law illegal format. M.Net Media and Neowiz
first time in five years, mostly driven was passed in April 2009 and became Bugs have attracted 350,000 and
by local K-pop. effective in July. Public awareness around 320,000 subscribers respectively. n
26
Sweden Sees Overall Music
Revenues Soar – What Went Right?
The Swedish market showed hopeful “Many people are asking - what went Sweden’s IPRED law came into effect
signs of growth in 2009, although right in Sweden this year?” says Jonas on the 1st April 2009. Based on the
it remains to be seen if the results Sjöström, head of independent label EU Enforcement Directive, it gave
will become a long-term trend. Playground Music and chairman copyright holders the right to obtain
Against a backdrop of largely declining of Swedish independent labels body the name and address of copyright
sales across Europe, the music market SOM. “This kind of growth is achievable infringers from ISPs. Evidence indicates
in Sweden was up by 10.2 per cent in the law had a strong impact on music
2009. Growth was driven by an 98.6 users in the short-term. Research by
per cent increase in the digital market “There is now some positive GfK in June 2009 found that 60 per
and a 1.9 per cent rise in physical cent of infringing file-sharers had
format sales. news but our whole sector stopped or reduced their activity
is still at risk.” as a result of the introduction of
Sweden’s resurgence appears to Jonas Sjöström, Playground Music the IPRED law. However, piracy
show a combination of the “carrot” levels in Sweden are believed to
of music offerings and the “stick” of have risen again since then,
new enforcement legislation. Digital when you have a combination of good underlining the need for sustained
sales growth in 2009 was driven user-friendly digital services and a enforcement and ISP cooperation.
predominantly by iTunes and Spotify, deterrent response to piracy. Of course,
with some music companies seeing this has to be just the start. The law in Spotify’s founder and chief executive
their digital revenues double in 2009. itself is not going to be a deterrent in Daniel Ek believes “carrot and stick”
Spotify launched in Sweden in October the long run unless it is enforced. We are crucial to Sweden’s success.
2008 and within a year reached 17 per also need more support for user-friendly “In Sweden, the most important
cent of the Swedish population. services, more investment from Swedish lesson is the public recognition
companies in local repertoire and of the problem. Most people now
These events have not been driven by more government pressure on ISPs acknowledge that file-sharing
the market alone, however. Sweden has to take their responsibility for curbing unlicensed music is illegal – it’s
also seen a strengthening of the legal piracy. Sweden’s independent labels not OK and it’s not something that
environment in 2009, with enormous have been extremely damaged by you should do, especially not when
publicity around both the implementation illegal file-sharing in the last few years. there are legal services that you can
of the IPRED anti-piracy law and the There is now some positive news but use instead.” n
ruling against the world’s largest illegal our whole sector is still at risk, and we
BitTorrent tracker, The Pirate Bay. have a big fight in front of us.”
27
The World Of
Brazil CONT. Czech Republic france cont. Greece cont.
Sonora Allmusic Deezer Newsphone Hellas
TIM Music Store eMusic E-Compil Ringtones.GR
Universal Music Loja i-legalne eMusic Sony Music Musicstore
28
Japan Netherlands cont. portugal cont. South africa CONT. Thailand Uruguay
Beatport Toost TMN Vodafone Live Cool Voice Cyloop
clubDAM YouMakeMusic Vodafone iMobile
Dwango Zazell Zed South Korea Mobifan USA
HMV Digital Japan ZoekMuziek 3355 Music Music Combo AmazonMP3
iTunes Japan YouTube Romania Bugs N-content AOL Music
Lismo eMusic Dosirak Pikpod Artist Direct
Listen Japan New Zealand Orange Lolsong Ringthai Bearshare
mora Amplifier Vodafone Melon Sab Mobile eMusic
mora win Bandit.fm MNet Sanook iLike
mu-mo Digirama Russia Monkey3 Shinee imeem
Music-jp iTunes Fidel MusicOn Tom Yum iMesh
Musico Jamster Jamster Musicsoda True Digital iTunes
Musing Last.fm mp3.ru Muz lala
Napster Music Station Nextload Ohdio Turkey MP3.com
Naxos Music Library Myspace Music Nokia Comes With Music Soribada Avea MySpace Music
OnGen Telecom Music Store Soundkey Fizy Napster
Reco-Choku Vodafone Sweden MPlay Qtrax
YouTube YouTube Singapore 7digital MTV Rhapsody
Geetune Åhléns Mynet Vevo
Latvia Norway Mobile 1 Bengans Muzik.net Yahoo! Music
eMusic 7digital Music Station Blipbeat Sendinle YouTube
Bulls Press Nokia Comes With Music CDON TTnetmusik Zune
Lithuania CDON.com Norway Nokia Music Store eClassical Turkcell
eMusic DVDHuset Samsung Funclub eMusic YouTube Venezuela
Elkjop Singtel AMPed Enjoy Cyloop
Luxembourg Expert Singtel Ideas Gazell Digital Store United Kingdom
eMusic iTunes Sony Ericsson PlayNow Ginza 3
iTunes Luxembourg Jamba Plus iTunes 7digital
MTV Starhub Play Jamba AmazonMP3
Malaysia Musikkonline Starhub Gee! Klicktrack Bleep.com
Bimbit Musikkverket & Playcom Xpointo Media Last FM eMusic
Gua Muzik NetCom Media Milkshake HMV Digital
Ruumz Nokia Slovakia MSN Music iTunes UK
Platekompaniet eMusic MTV Music Shop Jamster
Malta Spotify Music Station Last.fm
eMusic Telenor Musikk Slovenia Musikshopen MSN Music
TV2 eMusic MySpace MusicStation
Mexico mZone Nokia Comes With Music MySpace Music
American Express Panama Nokia Music Store Napster
Music Shop Cyloop Spain Poplife Nokia Music UK
In2Go 7digital Sony Ericsson – Playnow Nokia Comes With Music
Ideas Music Store Paraguay Beatport Arena O2
Mexico Cyloop Blinko Sound Pollution Orange
Ideas Radio Mexico FeelMP3 Deezer Spotify Play.com
Ideas Telcel eMusic Tele2 – Musikbutiken Sky Songs
iTunes Music Store Peru IbizaDanceClub.com Telenor Musik Spotify
Mexico Cyloop iTunes Spain Telia Musik Tesco
Iusacell Jamba Tre Music Store T-Mobile
Iusacell Music Box Philippines Jukebox Orange YouTube TuneTribe
Mixup Digital Fliptunes Last.fm Vodafone
Movistar OPM Online Los40.com Switzerland We7
Nokia Comes With Music Pinoy Tunes Magnatune 7digital YouTube
Nokia Music Store Star Records Movistar Emocion AmazonMP3
Prodigy MSN Mexico Tugtog Pinoy MTV Ex Libris
Tarabu MySpace iTunes
Terra Mexico Poland Nokia Music Store Jamba
Tvolucion eMusic Nokia Comes With Music Musicload
iplay.pl Olemovil MusicStation
Netherlands Jamba PixBox Napster
7digital Last.fm PlayNow Nokia Comes With Music This is a list of digital music services from around
Dance Tunes Melo.pl Rockola.fm Nokia Music Store the world that appears on the Pro-music website
Downloadmusic.nl mp3.pl Spotify Orange
eMusic Muzodajnia Vodafone PlayNow Arena (www.pro-music.org). Pro-music is endorsed by an
iTunes Netherlands MySpace Yes.fm Soundmedia alliance of organisations representing international
JAHA Nokia YouTube Sunrise Joylife
record companies (majors and independents),
Jamba Soho.pl Zed Vidzone
Kindermuziek.tv YouTube Vodafone publishers, performing artists, music managers
Legaldownload South Africa Weltbild and musicians unions.
Mega-Media Portugal DJs Only ZED
MP3downloaden 7digital GETMO
MSN Music Shop Beatport Jamster Taiwan The list is compiled by IFPI based on information
Nokia Comes With Music eMusic Just Music Ezpeer+
from its national groups at the time of publication.
Planet Music iTunes Portugal MTN Loaded iNDIEVOX
PlaymeLoud Jamba Music Station iNmusic It does not purport to be exhaustive and IFPI
Radio 538 Nokia Nokia Comes With Music KKBox cannot guarantee its 100 per cent accuracy.
Sony Ericsson PlayNow Optimus Nokia Music Store muziU
Readers should consult the www.pro-music.org
Plus Qmusika Pick n Play YouTube
Surf2Music SAPO/ Musicaonline Rhythm Online website for the most up to date information.
29
Digital Music Report 2010
Education is an essential element in addressing piracy, but can only form part of the
solution, alongside good commercial music services and well-enforced legislation.
The music industry has been actively employers which have been distributed found in 2009 that 78 per cent of the
involved in more than 70 education in multi-language versions around the UK population aged 16-54 understands
campaigns across the world over the world. The www.pro-music.org website file-sharing copyrighted music is illegal.
last six years, ranging from consumer is a one-stop information source,
initiatives to projects for schools, parents established as early as 2003, providing Despite all the educational work
and employers. An evaluation of these essential information about legitimate undertaken in recent years, the
activities leads to an inescapable digital music services. In France and evidence is strong that awareness-
conclusion, however: education is an Italy, consumer-targeted viral films have raising alone is inadequate in shaping
essential element in addressing piracy, brought home the unsung community of consumer behaviour in the digital
but can only form part of the solution, workers involved in bringing an album music market. The “carrot” of good
alongside good commercial music to the market. High-profile litigation legal services has a vital role to play.
services and well-enforced legislation. has also had a key role in the music So too does an element of sanction.
industry’s awareness-raising activities
Music sector campaigns have targeted in recent years. Research has shown that awareness
different audiences. The Young People, of the law alone has not succeeded in
Music and the Internet campaign aimed changing behaviour in a sustainable
at the “influencers” – parents and “Whilst more education way. Without a perception of risk,
teachers – has been rolled out in more is needed, increasingly comparable to speeding fines or other
than 20 countries and 13 languages, familiarity with the law does forms of social deterrent, consumer
in collaboration with the children’s behaviour remains largely unchanged.
welfare charity Childnet International not appear likely, on it’s own, This was revealed in the European
and the rights holders alliance Pro- to reduce file-sharing.” Union’s 2007 Safer Internet for Children
music. The campaign has been driven Harris Research report, covering 29 countries. The study
by demand from education authorities. highlights that “in the vast majority of
In 2008 and 2009 in the UK more cases, across all countries, children
than 135,000 information leaflets were Since 2003, the industry has taken know that most of the downloads are
requested by teachers, education more than 100,000 civil and criminal illegal, but they minimise, deny or justify
authorities and libraries. legal actions against individual illegal the practice. Everyone does it.”
high volume file-sharers in 22 countries.
IFPI has made available Digital File Check Surveys have showed both in the US The finding was reinforced in research
(DFC), an educational software tool aimed and Europe that these waves of well- conducted by Harris Research in the
at offering clear and simple advice on publicised legal actions had a very UK in 2009. The survey found that
how computer users can download music significant impact in raising awareness music file-sharing among those “very
safely and legally on their computer. DFC is of the law on unauthorised file-sharing. familiar with the law” (33%) was far
available in ten languages and distributed Research by GfK in Europe showed more common than among the general
with media and retail partners. that after legal actions awareness of population (23%). Harris concluded:
illegality levels reached 70 per cent. “Whilst it is undoubtedly the case that
Campaigns have also aimed to help In the US, research by Public Opinion more education is needed to persuade
educational institutions and employers Strategies in 2003 and 2004 showed file-sharers to cease sharing copyrighted
address copyright infringement on awareness levels jumped from 35 to music, increasingly, familiarity with the
their networks. The music sector has 74 per cent after the commencement law does not appear likely, on its own,
published guides for colleges and of lawsuits. Harris Interactive research to reduce file-sharing.” n
30
Page 10-11 photo credits:
Lady Gaga – Oliver Rauh
Black Eyed Peas – Meeno
Taylor Swift – James Medina
© IFPI 2010.