A new report from a recording industry association says illegal downloads are especially hurting vibrant music scenes in non-English-speaking countries
The record industry has for the first time played the nationalism card in its efforts to battle online piracy.
Hoping to up the pressure on governments to introduce harsh French-style anti-piracy laws – which include imposing fines, cutting off internet access and even jailing offenders – the record industry has warned that illegal downloading and streaming is killing off non-anglophone music in countries such as Spain, France and Brazil, which until now had vibrant music scenes.
In a new report, the International Federation of Phonographic Industries (Ifpi), the trade association representing the biggest record labels, celebrated growth in the digital music sector.
The market for legal digital music downloads is soaring, now representing more than a quarter – 27 percent – of all revenues for record companies, clocking up sales of $4.2 billion last year.
'All-you-can-eat' services, or deals bundled with mobile phone packages so that they appear to be free to the consumer, are seen as a compelling legitimate alternative to piracy.
"Music fans today can acquire tracks and albums in ways not conceivable a few years ago – from download stores, streaming sites, subscription services, free-to-user sites, [or] bundled with their broadband or a mobile phone handset," said Ifpi chairman John Kennedy.
This has represented a positive change of 12 percent on 2008, but the growth is still not enough to replace the losses caused by online piracy.
Digital sales are up a whopping 940 percent since 2004, but total music revenues are down 30 percent over the same period.
Europe is lagging behind in digital adoption, with only around 15 percent of sales coming from digital channels.
The report argues that this is a direct result of the high levels of piracy in the region – there are 29.8 million frequent users of file-sharing services in the top five EU markets alone, while other forms of piracy are growing.
The report also says that there is a north-south divide, with Italy and Spain showing considerably higher piracy levels.
The study notes that local music is "collapsing" in major markets as piracy kills off interest in new releases, driving down investment by the music companies in signing or cultivating talent that the firms already know will rarely crack foreign markets.
France has seen the number of local artist releases decline 60 percent over the 2002 to 2009 period, while Spanish artists have been hit by a 65 percent decline in sales of local artist albums that have cracked the top 50 in this time period. The Spanish legitimate music market is now only one third of its size in 2001 and fell by around 17 per cent in 2009 alone.
Album sales of Brazilian artists declined a full 80 percent from 2005 to 2008.
"A decade's worth of music file-sharing and swiping has made clear that the people it hurts are the creators...and the people this reverse Robin Hood-ing benefits are rich service providers, whose swollen profits perfectly mirror the lost receipts of the music business," the report quotes multimillionaire singer Bono as saying in response to the phenomenon.