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The music industry took a firm swipe at internet service providers (ISPs) today, accusing them of being in large part responsible for the dramatic loss in profits record labels have suffered as a result of illegal downloading.
In a strongly worded statement, the IFPI - the music industry body - called for the EU to draw up legislation that would place obligations on ISPs to monitor the traffic across their networks, and to suspend the accounts of customers who broke the law.
In its annual report, the IFPI said that revenue from digital downloads had risen by 40 per cent to $2.9 billion in the past year, but that this had not been enough to offset the "sharp decline" in CD sales which had resulted from "systemic piracy" on the internet.
"Copyright theft has been allowed to run rampant on their networks under the guise of technological development," John Kennedy, the IFPI's chief executive and chairman, said. "ISPs have largely stood by, allowing a massive devaluation of copyrighted music."
"This in turn has prompted a crisis that has wide implications for the whole digital marketplace. The moment for EU legislation to be drawn up has arrived."
Mr Kennedy's ultimatum was delivered as IFPI reported that revenues from digital music now accounted for 15 per cent of overall sales, but that the growth of digital sales had dropped from nearly 100 per cent between 2005 and 2006, to 40 per cent last year.
The IFPI estimated that 1.7 billion tracks were downloaded in the past year, but that for every song accessed legally, 20 were downloaded illegally using so-called 'peer-to-peer' networks. In Brazil - where 1.8 billion tracks were illegally shared - music sales had slumped by 50 per cent in the first half of 2007, while in Mexico, they fell by 25 per cent, according to research by IPSOS.
ISPs have long argued that they should not be responsible for the illegal file-sharing that takes place on their networks because they could have no way of monitoring the entirety of their traffic and are "mere conduits" of information.
They say that the content being accessed illegally is hosted on servers elsewhere - which they are powerless to close down, and that in any case data protection legislation prevents them from looking at individual packets of information being sent.
"ISPs are no more able to inspect and filter every single packet passing across their network than the Post Office is able to open every envelope," a spokesman said.
The IFPI report found that the US was still the largest market for downloads, where digital music accounts for 30 per cent of all sales, followed by Japan and the UK. In the UK 77.6 million tracks were bought online last year, up 47 per cent on 2006.
The report was also sceptical of the so-called 'advertising supported' model for digital music, where listeners are able to stream songs from a site 'for free' in return for watching or listening to ads. On Wednesday, Last.fm, the social music site, announced it had done a deal with all the major labels which will mean people can hear tracks up to 3 times, in their entirety, while being exposed to ads.
"Questions remain as to the potential for these models as some believe the addition of ads on free services will [send] consumers elsewhere, and there are continuing concerns about copyright infringement," it said.
Among the other findings of the IFPI report were:
- the top downloaded single in 2007 was Girlfriend, by Avril Lavigne, which sold 7.3 million copies
- sales of music directly to mobile phones grew by 100 per cent to account for 12 per cent of all sales. In Japan, sales of music to mobile accounted for 90 per cent of all digital music revenues
- there are now more than 6 million tracks licensed to be accessed through digital services, up from 1 million in 2003
- in South Korea, long a bellwether country when it comes to the uptake of new technologies, 60 per cent of the music bought is downloaded
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How many times have we heard about bands being ripped off by their record companies, how many times have artist ripped us off by being paid well over the top for their services by record companies, Eg, Robbie Williams, a £70,000,000 contract, come on even Robbie is not wrth that much in one hit.
There are many examples of artists and their record companies earning extravicant amounts of money at our expence, the price of CD,s in the US has always been cheaper than the UK, the record companies know about this and so do the artists and has anything been done, No!
You only have to watch a few episodes of Gribs on Sky TV to wounder how much artists are being paid to be able to afford multi million pound houses.
Sure charge us for downloading music but make it an amount the public are happy with paying not the price they have set themselves today.
Dont artists make most of their money out of concerts rather than record sales anyway !!! But I never see ticket prices dropping.
Richard, Slough, Berks
The music industry execs are getting their just desserts after years of fleecing the public and music artistes. If they had refrained from over inflating the price of CD's etc in order to line their own greedy pockets this situation would not be what it is today, so boo hoo to you!
Any bands / singers with real talent know they can earn plenty of money from touring and live shows, they just might have to do them a bit more often to maintain the 'star' lifestyles they have become accustomed to rather than sitting back whilst the recording royalties roll on in, and the public aren't going to complain about that if it means they get to see their fav bands play live more frequently.
Sarah Hosking, Leigh, UK
90% of the CD's that I have bought this year I've got from amazon - used, so not one penny has gone to the record companys or the artists for that matter, should that be made illegal. most bands will make 30-40p out of the price of a £10 CD, I think thats your crime.....I remember as a kid, girlfriends who's whole album collections were 100s of tapes and maybe 6 or so CD's .....Criminals all of them.....they must be stopped before our whole way of life burns in a pit of hellfire....they are dirty and must be put to death....oh sorry I don't know what came over me....I am the criminal for not paying retail....I now know what I must do....goodbye ....oh hold on first I must make a will out leaving all my estate to the IFPI .
jay, manchester, England
Shame, the poor music companies. They no longer squeeze huge profits out of both artics and consumers as their legacy sales channels of music stores and huge investment in CD's is no longer required. The internet is killing off the middle man, and that's all that the music giants are. People will pay for music (as iTunes shows), so why not have artiists making their own MP3's, selling them on the internet, and cutting out the music companies completely ?
Tom, London,
why would i want to buy a CD?? i do not believe i own a CD player anymore.. The world is changing...fast, those companies that can be flexible and adapt will succeed, the rest will get left behind.
charlie smith, CA,
The music industry mafia is getting its comeuppance at last. The genie is out of the bottle. People now realise that they have been paying an arm and a leg for media that costs pennies to make. The music industry mafia has bullied the public for far too long. It's time its enormous power (especially in the UK where it preys on newspapers and magazines with libel suits, using whoreish libel laws) was destroyed.
Not one person on Planet Earth outside the industry has any sympathy with the music industry's predicament. It's time the fat cat music execs and their hitmen corporate lawyers got the jobs they deserve - mopping the floors of abbattoirs.
James Trubshaw, Düsseldorf, Germany
The music industry has long been over charging us for music and I'm afraid this is the consequence. Until prices are lowered there will always be a method and motive to download media for free. Perhaps if the music industry stopped over paying its artists and artists started living a much more real lifestyle without splashing money left right and centre, the costs to the industry and thus the consumer would be greatly reduced.
Steve Powell, Lydney, Gloucestershire, UK
The idea thatdownloading hits small bands more is a myth, in fact it can if used correctly bolster sales by allowing them access to customers who wouldn't usually hear of them.
If a band is small it by definition has less people who listen to them and own cds so therefore there are less peers to download from where a large band will have mny download sources. In other words the variance is linear suggesting that the loss would be a constant percentage of sales ad in the benefit of having advertising for small bands (big companies can fund this themselves) it gives them a competitive edge if anything.
craig, london,
Simple cure?
Music industry cuts prices to what production costs plus a small percentage, NOT to what they think they can get away with, piracy suddenly becomes uneconomical, problem solved.
greed has been your undoing.
the gravy train has reached its final destination
Dave, York, UK
Suing ISPs because of copyright infringement is like suing the M1 because of speeding drivers. This all smacks of desperation.
Warren, Shanghai,
These music industries r full of it. I haven't payed for a song download in months. Me and my friends just use spiralfrog and download the music for free! This music u can put on your computer and portable mp3 player. And its perfectly legal.
I really cant see the difference between this and sharing music as far as the music industries profits go. Either way the person getting the music is not paying other than having to renew his membership each month, which is free, is far easier than paying.
Thanks!
Sterling, lexington, North Carolina
The music industry chiefs are completely out of touch with reality. instead of thinking outside the box and embracing the new digital era of music, they harass their customers, other businesses and now ISPs. What a bunch of clowns...
Clearly an indication of the death of the big labels that refuse to join the new world of music. They look to blame everyone else. Its their greed that is pushing a faction of listeners to download illegally. They sell their CDs at $15. you can download the same for $9. Their greed is evident...
They forget that the economics of scale say that if they priced their downloads at $6, they would sell more music and in the long run sell more to more people and the price would be low enough to discourage the casual downloader.
To All of you BIG EXECs in the recording industry... Your days are numbered, you better start looking for new jobs. you are being replaced by computers and the internet and savy shoppers...
GOOD RIDDENCE
Ed, Essex, CT
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