Global music industry warns of job losses from piracy threat

Jan 20, 2011, 13:22 GMT

London - Digital piracy continued to threaten revenues and jobs in the music industry in 2010, even though action against the illegal downloading of music gained momentum worldwide, according to a report published in London on Thursday.

The International Federation of the Phonographic Industry (IFPI) said digital music revenues grew by an estimated 6 per cent globally in 2010 to 4.6 billion dollars, accounting for 29 per cent of the trade revenues of record companies.

In 2009, revenue growth was 12 per cent.

Initial action to stop mass illegal file-sharing had been announced in France, Ireland and South Korea during the reporting year, while progress in clamping down on piracy was expected in Britain, the European Union, New Zealand and Malaysia this year.

'Many governments are now recognizing the need for proportionate and effective steps to curb piracy,' said Frances Moore, the chief executive of IFPI, in the annual report.

But despite the efforts made by governments and the industry, piracy remained a threat, and up to 1.2 million jobs could be lost in the creative industries in Europe alone if no further action was taken.

'As we enter 2011, digital piracy, and the lack of adequate legal tools to fight it, remains the biggest threat to the future of creative industries,' said Moore.

'Great new legitimate music offerings exist all over the world, offering consumers a wide range of ways to access music. But they operate in a market that is rigged by piracy, and they will not survive if action is not taken to address this fundamental problem. This is the challenge and the opportunity for governments to seize in 2011,' the report said.

It said digital piracy had an impact not only on revenues, but also on jobs, investment and consumer choice. It also meant that fewer new artists were breaking through globally.

Total sales by debut artists in the global top 50 album chart in 2010 were just one quarter of the level they achieved in 2003, said the report.

Traditionally vibrant music local industries, such as Spain and Mexico, were especially hard hit. In Spain, where music sales fell by an estimated 22 per cent in 2010, no new home-grown artist featured in the country's top 50 album chart, compared with 10 in 2003.

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