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IFPI calls for P2P crackdown in face of local losses

Chris Andrews

Could ‘MP3 successor’ be the key to curbing piracy?

More than a quarter of all recorded music industry revenues worldwide now come from digital channels, as music companies increasingly form licensing agreements with ISPs, mobile operators, subscription services, streaming sites and download stores.

However, despite the continuing growth of the digital music business - with trade revenues up 12 per cent to an estimated $4.2bn in 2009 - illegal file-sharing and other forms of online piracy are eroding investment and sales of local music in major markets, according to a new report from the International Federation of the Phonographic Industry (IFPI).

The Report calls for the urgent adoption of laws to curb P2P and other forms of online piracy, with the IFPI’s Chairman and CEO John Kennedy, saying: "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, bundled with their broadband or a mobile phone handset.

"It would be great to report that these innovations have been rewarded by market growth, more investment in artists, more jobs. Sadly that is not the case. Digital piracy remains a huge barrier to market growth and is causing a steady erosion of investment in local music.”

The report noted that in Spain, which it said has one of the highest rates of illegal file-sharing in Europe, sales by local artists in the top 50 have fallen by an estimated 65 per cent between 2004 and 2009; France has seen local artist album releases fall by 60 per cent between 2003 and 2009; and in Brazil, full priced major label local album releases from the five largest music companies in 2008 were down 80 per cent from their 2005 level. Illegal file sharing, it said, is behind these figures.

“The collapse in sales and investment in France, Spain and Brazil, countries with traditionally vibrant music cultures, testify to this and are a warning to the rest of the world,” said Kennedy.

It is not surprising that the organisation representing the recording industry is calling for a crackdown on illegal file sharing. But this is a debate that continues to rage: is the best way of dealing with illegal file sharing to crack down on it, or to come up with a new model to take account of how music is now consumed?

On that note, it was announced this week at the MIDEM festival in Cannes that a new digital music format, dubbed MusicDNA, is set to succeed the MP3, which would indeed be a step towards addressing piracy issues if it comes to fruition.

Lead by BACH Technology, and backed by Fraunhofer IDMT, which developed the MP3 format, MusicDNA is an enhanced, unified media format that combines audio with extensible metadata including audio analysis, manual annotations, business intelligence, and virtually any type of additional multimedia.

In practical terms it allows owners of a music file to access additional updated content, including lyrics, artwork, tour dates, blog posts, videos, and Twitter feeds. Only legitimately purchased MusicDNA tracks will be dynamically updated, while pirated versions will remain as static files.

A beta version is set to launch in the Spring this year. Whether this will actually stop illegal file sharing, or at least significantly curb it, really depends on how valuable the additional information provided with the file actually is, the ubiquity of the format, and of course, getting the pricing models right. If people can be convinced of the value of this ‘whole package’ music download, and the recording industry fully gets behind it, then perhaps we are really on to something here.

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