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Music industry revenues climb again

Digital revenues now a third of worldwide music revenue; NZ peer-to-peer use drops by 16 percent according to international survey

The music industry is "recovering" from the depredations long said to be due to illegal digital downloads, says a report by IFPI (International Federation of the Phonographic Industry).

The report credits the legitimate industry's own "diversification" into digital media for the improvement in revenue.

"Record companies' digital revenues for 2012 are estimated at US$ 5.6 billion, up an estimated nine per cent on 2011 and accounting for more than a third of total industry revenues (34 percent). Digital channels account for the majority of income in an increasing number of markets including India, Norway, Sweden and the US."

The report quotes Warner Music vice-president Stu Bergen who says that digital channels have given the music industry better geographical reach.

"Until recently, the vast majority of our revenues came from a handful of countries. Today, digital channels mean we can monetise markets worldwide much more effectively," Bergen says.

New Zealand is only given a brief mention -- the report notes the entry of Spotify and YouTube channel VEVO to the territory and records a 16 percent drop in use of peer-to-peer services in New Zealand following the introduction of a notice system and fine sanctions in the Copyright (File Sharing) Amendment Act.

The first three prosecutions for music downloads under this system have taken place this year, resulting in three-figure fines, the highest being $797.17. The legislation provides for a maximum fine of $15,000.

IFPI has, however, conducted a case-study of the market in Australia, which still lacks a "graduated response" system of notices and fines like New Zealand's. A chart shows sales of recorded music there nevertheless increasing in 2012 to $A398 million, as compared with 2011's $A383 million -- the first increase since 2005, when total sales were $A528 million.

IFPI continues to urge further measures against services providing for illegal downloads, calling them unfair competitors to the growing number of legitimate providers.

It suggests more could be done by ISPs in blocking access to providers of illegal copies of music and by search-engines in changing their algorithms to promote legal before illegal channels.

"In August 2012, Google announced it was altering its algorithm to take into account the number of infringement notices it had received from rights holders about specific sites," IFPI says.

"That is a welcome step in principle, but unfortunately has not seen any impact," the report says.

Throughout the long controversy over the effect of online file sharing, which has led to changes to copyright law in many countries, there has been a strong voice of opinion that the New Zealand industry has not been doing enough to provide legitimate routes for download of recently released music and movies.

For example, Netflix vice-president Brent Ayrey, speaking at ITEX in Auckland in 2011 was asked why the service was not launching in New Zealand, and he blamed poor bandwidth and the difficulty in negotiating local rights.


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