IFPI: 31% Decline in Global Music Sales

Says sharp decline in physical sales hasn’t been offset by meager rise in digital sales, and says there is “growing worldwide momentum” for govt’s to get involved to stop P2P. The only problem is that digital sales will never offset physical sales as music fans now have the option to buy a single track for 99 cents versus the previous business model that required a $19 album purchase.

The International Federation of the Phonographic Industry has released its annual music industry report, and the results are about as surprising as what it says needs to be done to fix them.
Like all other music industry interest groups the IFPI suffers from the delusion that digital music is like physical music, and that two would be equal if “wasn’t for them meddlin’ kids” – aka illegal file-sharers. It says that in 2010 CD sales continued their sharp decline while digital music sales rose by a mere 6%, but what it doesn’t say is that people no longer want to own clunky, outdated CDs.
Why would u want to lug around a bulky portable CD player with a capacity of 17 songs when you could load up an iPod the size of a matchbook cover with 500 or more?

Digital music sales will never match the previous levels of physical music sales because the album is also now unbundled. Music fans don’t have to buy an entire album to hear the one or two good songs they heard on the radio. Now they can get the greatest hit for as little as 99 cents.
Sadly for the IFPI, but even sadder for the public at large, is that it thinks it can magically make digital music sales surge enough to give it the levels of overall it was accustomed to prior to the advent of P2P.
In the report Frances Moore, IFPI’s Chief executive, speaks of “encouraging signs” that the “tide of government opinion is turning.” She says the “music
industry is still hemorrhaging revenue as a result of digital piracy,” and cites a study that predicts “million of jobs will disappear” from the European creative industries by 2015 if piracy isn’t stopped.
The problem with that study and its claims of millions (1.2mln) of jobs lost is that it includes a range of sectors that have absolutely nothing to do with digital piracy It includes things like art fairs, advertisers, and anybody involved in the sale of TVs, DVDs, radios, gaming consoles, music instruments, photocopiers, and cameras.

ISP-level filtering and “three-strikes” legislation won’t protect the jobs of guys at your local Best Buy. Moore doesn’t care about the facts, and insists the music industry needs “adequate legal tools” to fight illegal file-sharing.
“Action to stop digital music piracy is gaining momentum worldwide, with implementation by ISPs of warnings and deterrent sanctions taking effect in three countries in 2010 and governments in other countries expected to implement measures in 2011,” she says, pointing to South Korea, France, and Ireland as examples of what’s in store.
The problem with all of her theory is that it isn’t true. There is no “worldwide momentum.”
South Korea only passed “three-strikes” legislation after the US hinged a supposed ”free trade” agreement on its passage. It’s been nearly two years and not only has the US still not upheld its end of the bargain by approving that free trade agreement, but as of last October only 31 people have had their Internet accounts suspended. There are an estimated 48.7 million Internet users in South Korea.
If this example wasn’t foolish enough, Moore cites France and Ireland.
In France only 4% of those who have received warnings for illegal file-sharing have quit while more than half say they will be “more vigilant then before.” In fact, illegal file-sharing has reportedly become a “national sport” in France as the country’s youth rebel against copyright legislation they rightly consider among the most repressive in the world.

With Ireland the example is even more dubious. Only one ISP warns and suspends (12mos) Internet users for illegal file-sharing. Eircom’s “voluntary partnership” with the Irish Recorded Music Association (IRMA) was the result of an out of court settlement over outrageous accusations that it was responsible for any copyright infringement carried out by its customers. Rather than fight back it capitulated.
Other Irish ISPs had the guts to fight back, and the country’s High Court ruled in their favor.
This is hardly a portrait of “worldwide momentum.”
The IFPI also conveniently leaves out other facts like a UK study purporting a decline in P2P among youth in favor of free streaming, another source of revenue decline.

Moreover, the only study I really pay attention to is the one from last September which found that since the advent of digital music the income of the average musician has increased by some 66%! There’s a big difference between record labels and musicians, and the latter is the only one I’m concerned about.