GrayZone - Breaking News Events

· New IFPI data shows that illegal file-sharing is kept in check as broadband use surges

· Music fans worldwide turn to legal downloads; lawsuits and spyware top concerns for file-sharers

July 21, 2005 – Illegal file-sharing of music is being kept in check while the number of legal tracks downloaded internationally tripled to 180 million in the first half of 2005, new figures released by the international recording industry show today.

The IFPI figures indicate that the surge in broadband use globally is benefiting the legal music business while illegal file-sharing remains virtually flat. Infringing music files available on file-sharing networks and websites rose slightly (3%) from 870 million in January to 900 million, while broadband lines installed grew four times faster at 13%.

Meanwhile the legitimate digital music industry is expanding fast globally. IFPI estimates that single track downloads in the top four online markets in 2005 have more than tripled in the last year.

Legal music downloads in the first six months of 2005 in the US, the UK, Germany and France outstripped the total for the whole of last year. Single track downloads in these markets have risen to 180 million in the first half of 2005 compared to 157 million for the whole of 2004. This is more than three times the 57 million downloads of the first half of 2004.

The legitimate market is responding to that demand, with over 300 digital sites now available worldwide – three times the number of one year ago.

At the same time research suggests there has been a clear shift of consumer attitudes in response to the well-publicised legal actions against file-sharers in 11 countries. More than 1 in 3 file-sharers surveyed in the US and the UK cites “fear of legal action” as the main reason for stopping illegal file-sharing ^[1].

Signs of a turning tide are also visible in other countries where there have been sustained legal actions against illegal file-sharing. In Austria, third party surveys show a sharp reduction in illegal file-sharers, down 26% between the first quarter of 2004 and the same period of 2005. This follows earlier research from Germany showing a sharp fall in illegal music downloads in 2004.

John Kennedy, IFPI Chairman and CEO said: “We are now seeing real evidence that people are increasingly put off by illegal file-sharing and turning to legal ways of enjoying music online. Whether it’s the fear of getting caught breaking the law, or the realisation that many networks could damage your home PC, attitudes are changing, and that is good news for the whole music industry.

“We are not there yet. Many still appear to be gripped by a bad habit they are finding hard to break. This is despite all the public warnings and information campaigns about digital music that have been organised in the last year. These people are now increasingly likely to face legal actions against them. They are ordinary men and women in ordinary occupations - doctors, students, teachers, cooks, nurses, and even a judge. But they are having to learn the hard way that the price for file-sharing illegally can be as a high as a fine of several thousand euros.”

The legal downloads market has taken off in the first half of 2005, especially in Europe ^[2].

In the UK, single track downloads in the first half of 2005 were up ten fold on the same period of 2004, at just over 10 million. French and German legal download markets have also increased sharply, to an estimated 4 million and 8 million single track downloads respectively in the first half 2005.

In the US, legal music downloads are estimated to have nearly tripled from 55 million in the first half of 2004 to 159 million tracks in the first half of 2005 ^[3].

Subscriptions to digital services are up sharply in 2005, with a total of 2.2 million people now subscribed to music services globally. This is up from 1.5 million subscriptions estimated in IFPI’s Digital Music Report in January.

Meanwhile online services keep growing, with new services registered onto IFPI’s directory every week (www.pro-music.org/musiconline.htm). There are now over 300 online music sites globally – 190 of these in 23 European countries. iTunes offer 1.5 million tracks with Napster close behind offering 1.2 million.

Third party findings suggest litigation against illegal file-sharing is changing behaviour. Independent research company Jupiter found that 37% of currently active file-sharers in the UK are cutting down through fear of legal action ^[4]. In the US, lawsuits are the main reason why people are stopping illegal downloads. One in two people stopping blames the fear of legal action, while two in five point to spyware, adware and viruses found on P2P networks.

IFPI is actively supporting a global education campaign “Young People, Music and the Internet” launched last month by the charity Childnet International with the music sector Pro-music alliance.

IFPI Communications Director Adrian Strain said: “Our global educational efforts, too, are helping to transform the public debate on digital music. In the next few months we will step up the momentum, to get the “download legally” message our to all our key audiences - parents, children, companies, schools and colleges, music fans, the downloaders of today and the downloaders of tomorrow.

“We are encouraged by the success and feedback surrounding the recent parents educational campaign launched by Childnet International and Pro-music “Young People, Music and the Internet”, with tens of thousands of leaflets already going to hundreds of retailers and libraries in Europe and North America.”

The record industry started taking legal actions against illegal file-sharing in September 2003, and since then 14,227 actions have been announced in 12 countries. Lawsuits are continuing in Austria, Denmark, Finland, France, Germany, Iceland, Ireland, Italy, Japan, the Netherlands, the UK and the US.

Hundreds of people have faced sanctions or paid fines or compensation averaging more than €3,000 each. They are predominantly city-dwelling men aged 20-35 from all walks of life - in occupations from company directors to car salesmen and teachers to lorry-drivers.

Recent cases include one involving a German doctor, whose daughter had stored and was file-sharing thousands of illegal downloads on the office PC.

In the UK, a London-based jazz singer told her 19 year-old son that he would have to repay the £2,500 compensation payment in weekly installments after having been caught using the family computer to file-share 1,330 songs.

In Ireland, the High Court ordered two internet service providers (ISPs) to disclose the names and addresses of 17 internet subscribers by last Friday 15 July. The court found that privacy concerns ‘must yield to public concerns for the protection of Intellectual Property rights, in situations where infringement threatens to erode those rights’.

In Italy, 55 individuals including professionals, teachers and college students allegedly involved in file-sharing from nine different regions were raided and a major network shut down by the Italian telecom police, assisted by the Italian industry's antipiracy body, FPM. The "cucciolandia" network had more than 100,000 users and was notorious in the file-sharing community in Italy.

For further information please contact Adrian Strain, Julie Harari or Fiona Harley at IFPI Communications on tel: +44 (0)20 7878 7935

IFPI is the organisation that promotes the interests of the international recording industry worldwide. Its membership comprises over 1,450 major and independent companies in more than 75 countries. It also has affiliated industry national groups in 48 countries. IFPI’s mission is to fight music piracy; promote fair market access and good copyright laws; help develop the legal conditions and the technologies for the recording industry to prosper in the digital era; and to promote the value of music.

^[1] Jupiter UK Music Consumer Survey, April 2005 and NPD “Digital Music Landscape Shifting” press release, June 23, 2005

^[2] Figures from IFPI National Groups; SNEP (France), IFPI Germany (Germany), BPI (UK), RIAA (US)

^[3] Nielsen SoundScan

^[4] Jupiter UK Music Consumer Survey, April 2005