IFPI Digital Music Report 2010

IFPI Digital Music Report 2010 

Music how, when, where you want it

Contents 

3. Introduction 

4. Executive Summary: Music – Pathfinder In The Creative Industries’ Revolution 

8. The Diversification Of Business Models 

10. Digital Music Sales Around The World 

12. In Profile: Pioneers Of Digital Music 

18. Competing In A Rigged Market – The Problem Of Illegal File-Sharing 

20. ‘Climate Change’ For All Creative Industries 

24. Graduated Response – A Proportionate, Preventative Solution 

28. The World Of Legal Music Services 

30. Consumer Education – Lessons Learned

Music How, When, Where 

You Want It – But Not 

Without Addressing Piracy 

By John Kennedy, Chairman & Chief Executive, IFPI 

This is the seventh IFPI Digital Music 

Report. If you compare it to the first 

report published in 2004, you can 

see a transformation in a business 

which has worked with the advance 

of technology, listened to the consumer 

and responded by licensing its music 

in new formats and channels. 

In 2009 globally, for the first time, more 

than one quarter of record companies’ 

revenues came from digital channels. 

Fans can acquire tracks and albums 

in ways inconceivable 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 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. The slump in sales and 

investment in three major music markets 

outlined in the Report testify to this and 

are a warning to the rest of the world. 

On the positive side, we have built a 

US$4.2 billion digital business full of 

consumer-friendly services. On the 

negative side, our global sales fell by 

around 30 per cent from 2004 to 2009, 

the growth of our digital sales is slowing 

and even the success stories reported 

in this publication will struggle to survive 

unless we address the fundamental 

problem of piracy. 

Some ask, ‘why not give up the fight?’ 

The answer is straightforward – first, we 

cannot afford to. To continue to invest 

in new artists, we have to tackle mass 

piracy. Second, we are progressing towards 

an effective response. The progress is 

agonisingly slow for an industry which does 

not have a lot of time to play with – but it is 

progress nonetheless. 

On page 20 of the Report, Stephen 

Garrett, head of the production company 

Kudos, refers to a “climate change” in 

the creative industries. That expression 

“ To continue to invest in 

new artists, we have to tackle 

mass piracy.” 

captures the way the debate over digital 

piracy has evolved. You hear it around 

the world: this is no longer just a problem 

for music, it is a problem for the creative 

industries: affecting film, TV, books and 

games. In this arena, the music industry 

is the pathfinder of the creative industries, 

pioneering with new offerings for the 

consumer. In 2009, Rupert Murdoch 

said that the content kleptomaniacs 

should not triumph and Microsoft spoke 

out against piracy, ready to ban players 

from Xbox live if they had modified their 

consoles to play pirated discs – no three 

strikes procedure needed! 

The thinking behind the debate has 

also crucially changed. It is about the 

future of a broad base of creative industries 

that have huge economic importance 

and employ vast numbers of people. 

This is one of the reasons why the French, 

UK and other governments are set on 

3 

legislation to curb illegal file-sharing. 

Another clear change is within the music 

sector itself. It was, until recently, rare 

for artists to engage in a public debate 

about piracy or admit it damages them. 

In September 2009, the mood changed. 

Lily Allen spoke out about the impact of 

illegal file-sharing on young artists’ careers. 

When she was attacked by an abusive 

online mob, others came to her support. 

The mood of change is clearly reaching 

governments. In 2009, legislation 

requiring ISPs to tackle P2P piracy was 

adopted in France, South Korea and 

Taiwan. These countries established in 

law that it is appropriate for those who 

persistently violate copyright, despite 

repeated warnings, to face a proportionate 

and effective sanction. This sets a 

tremendous precedent in the protection 

of intellectual property rights online. In 

the UK, as in France, it is understood that 

government has a key role in protecting 

content on the internet. Even in the most 

competitive, innovative and market-driven 

industries, the market itself can only 

operate under the effective rule of law. 

This Report points the way to an optimistic 

future for the music industry – great 

offerings for consumers, more investment 

in artists, economic growth and more jobs. 

Yet we are nowhere near that future today, 

and we will not get there without a secure 

legal environment where creative work is 

rewarded and copyright theft is effectively 

deterred. To unlock the enormous 

potential of digital music, we have to 

address piracy both on P2P networks 

and in other forms. That is where, today, 

we look to governments for action. n

Digital Music Report 2010 

Executive Summary: Music – Pathfinder In The 

Creative Industries’ Digital Revolution 

“ Our aim is not simply to be digitally savvy – our aim is to be consumer savvy.” 

Elio Leoni-Sceti, Chief Executive, EMI Music 

A diversifying industry 

The music business is continuing to 

lead the creative industries into the 

digital revolution. In 2009, for the first 

time ever, more than a quarter of the 

recorded music industry’s global revenues 

(27%) came from digital channels – a 

market worth an estimated US$4.2 billion 

in trade value, up 12 per cent on 2008 

(IFPI). In the US, the world’s largest music 

market, online and mobile revenues 

now account for around 40 per cent of 

music sales. Consumer choice has been 

transformed as companies have licensed 

more than 11 million tracks to around 

400 legal music services worldwide. 

Fans today can access and pay for music 

in diverse ways – from buying tracks 

or albums from download stores, and 

using subscription services, to using 

music services that are bundled with 

devices, buying mobile apps for music, 

and listening to music through streaming 

services for free. 

Music companies have licensed advertising 

–supported services to attract non-payers 

and file-sharers, struck groundbreaking 

deals with major ISPs, developed 

partnerships with device manufacturers 

and established a new platform for 

high-quality music videos aimed at mass 

audiences. All of these initiatives are 

experimental and innovative, and all are 

predicated on the simple principle of 

meeting the needs of the music fan. 

“ Our vision is music availability 

everywhere, at any time 

and in any place. But the 

biggest question is how do we 

monetise it in an environment 

of widespread piracy?” 

Eric Daugan, Senior Vice 

President, Commercial Strategy, 

Warner Music International EMEA 

“Our aim is not simply to be digitally 

savvy – our aim is to be consumer savvy. 

We know that people want to consume 

music digitally, so we need to be digitally 

aware, have digital capabilities and 

marketing ability,” says Elio Leoni-Sceti, 

Chief Executive, EMI Music. 

In the digital era, the music industry 

is diversifying its business models and 

revenue streams. The à-la-carte download 

model, pioneered by iTunes, remains the 

largest revenue source in the online sector 

and has more than 100 million accounts 

across 23 countries (Apple). Recent 

innovations in the à-la-carte sector include 

the introduction of variable pricing, which 

has increased the conversion of track 

purchases to album sales, as well as the 

launch of the iTunes LP and the rollout of 

DRM-free downloads internationally. 

4 

New business models 

Record labels are making music 

available in an unprecedented 

number of ways. A few years 

ago, an album would have been 

delivered in just a few formats. 

Today, albums come in hundreds 

of formats and products. 

For example, Beyoncé’s 

I Am... Sasha Fierce album 

is available in more than 

260 different products in 

the US including music 

videos, mastertones, 

ringback tones and 

audio tracks. 

Over the past couple of 

years, music companies 

have partnered with 

ad-supported services 

such as Spotify, Deezer, 

MySpace Music and 

We7, ISPs such as 

TDC in Denmark, Terra 

in Brazil and Sky in the 

UK, mobile operators such 

as Vodafone, handset makers 

such as Nokia and Sony Ericsson, 

and online video channels such as 

Hulu and VEVO.

Access and bundling 

Despite this progress, the challenge is 

to take digital music to the commercial 

mass market and “monetise” existing 

behaviour. There is huge untapped 

consumer demand and potential for 

growth. Research conducted by 

Capgemini found that 70 per 

cent of all music consumed 

in the US, UK, France and 

Germany came through digital 

channels, while revenues 

from digital platforms in those 

countries accounted for only 35 

per cent of industry revenues. 

One way of realising this 

growth potential is to generate 

value from the behaviour of 

the vast number of people 

who currently do not pay for 

music they consume. 

In the US, only 18 per cent 

of internet users aged 13 

and over regularly buy digital 

music today (NPD Group). 

In Europe, digital 

adoption is even 

less widespread – 

only 8 per cent 

of internet users 

in the top five 

EU markets 

frequently buy 

music digitally 

(Forrester). 

“ We’re much closer to the utopia, 

where we’re extracting €1 out of 

a million consumers as opposed 

to €10 out of a thousand.” 

Rob Wells, Senior Vice 

President, Digital, Universal 

Music Group International 

“Music access” is seen as a compelling 

legitimate alternative to piracy. Music 

is bundled with services and devices, 

or offered at no cost to the consumer 

on an advertising-supported basis. 

This low “average revenue per user” 

and high volume approach is seen 

as one of many hybrid revenue models 

rather than a single model for the future. 

Convergence of services across 

devices is also a major theme in 

digital music. This is helping break 

down the interoperability barriers that 

have limited the consumer appeal of 

some services and restricted the growth 

of the digital business. Each year 

the consumer is getting a better deal 

as it becomes easier to transfer and 

use music across multiple screens 

and platforms. In 2009 for example, 

mobile applications brought streaming 

services Spotify, Deezer and others 

to devices like the iPhone, allowing a 

premium service offering portability. 

This convergence of services and 

devices, opening up new revenue 

channels is expected to accelerate. 

5 

Executive Summary 

Barriers to growth 

The digital music business still faces 

many barriers to its growth. These include 

lack of marketing by services in some 

countries, problems with publishing rights, 

consumer reluctance to make online 

payments and the complex challenge 

of creating services that are user-friendly 

to different consumer groups. 

Transcending all these obstacles, 

however, is the problem of digital piracy. 

Numerous indicators, outlined on page 

18 of the report, confirm digital piracy 

is choking revenues, new services and 

investment. Surveys also confirm the 

simple proposition supported by focus 

groups and anecdotes everywhere – 

that the majority of consumers who 

illegally download, rather than use the 

many legitimate alternatives available 

today, do so because of the lure of “free”. 

A variety of third-party research 

conclusively indicates that the net 

effect of illegal file-sharing is reduced 

purchasing of music. This is despite the 

obvious fact, also borne out in research, 

that some file-sharers are often also 

buyers of music. 

“ In order to take the business 

to the next level and capture 

the enormous potential that’s 

still untapped, we need new 

services to truly break through 

to the mass market. To do that, 

an attractive user interface, 

a strong value proposition 

and a clear marketing message 

are essential, as is an effective 

way of curbing piracy.” 

Thomas Hesse, President, 

Global Digital Business, U.S. 

Sales & Corporate Strategy, Sony


Piracy hits investment 

The crippling effects of illegal filesharing 

are clear. Overall music sales 

fell by around 30 per cent between 

2004 and 2009. The worst-affected 

markets are countries where, despite 

the industry’s efforts, legitimate digital 

services have had little chance to take 

root. In Spain where legal problems 

have frustrated the ability to take action 

against piracy, sales fell by around 

18 per cent in 2009 and the market is 

now about one third of its level in 2001. 

In Spain and elsewhere the victim has 

been investment in local acts. 

The number of local artist album sales 

fell by 65 per cent between 

2004 and 2009. In France, 

the number of local repertoire 

album releases plummeted 

from 271 in the first half of 

2003 to 107 in the same 

period of 2009. In Brazil, local 

artist album releases by top 

music companies slumped 

more than 80 per cent 

between 2004 and 2009. 

Salvador Cufi, Chairman of 

indie label Musica Global, 

based in Girona, Spain, says 

“We have made a great effort 

to digitise our catalogues 

and to create new business 

models for the internet – but 

there is no way in today’s 

market that we can make 

those investments profitable. 

It is a very sad situation that 

we can no longer invest in 

new artists in the way we 

would like.” 

Eric Daugan, Senior Vice 

President, Commercial 

Strategy, Warner Music International 

EMEA, says “Our vision is music 

available everywhere, at any time 

and in any place, but the biggest 

question is how do we monetise it in 

an environment of widespread piracy? 

One way is to come up with products 

that people want to consume, and 

that is our responsibility. But if these 

products and services are to flourish 

we also need help from governments 

and ISPs.” 

Digital Music: Charting Change 

Research by Harris Interactive in the 

UK shows that although P2P remains 

the major piracy problem, the illegal 

distribution of music through other 

channels grew considerably in 2009. 

Unlicensed download sites, news 

groups, specialised search engines, 

forums, blogs and cyberlockers were 

all significant channels for infringement. 

2003 2009 

Licensed music services Less than 50 400+ 

Catalogue available 1 million 11.6 m tracks 

Industry’s digital revenues US$20m US$4.2 billion 

% of industry’s revenues 

from digital channels 

6 

Negligible 27% 

260+: Number 

of different products 

Beyoncé’s I Am... 

Sasha Fierce was 

available in 2009

“ There have to be sanctions, ISPs have to be involved and there 

needs to be back-up legislation. I would have preferred a purely 

commercial solution to achieve this, but sadly it doesn’t look 

as if that is going to happen. That is why there needs to 

be the encouragement coming from legislation.” 

Martin Mills, Chairman, Beggars Group 

Case studies, creative industries 

There are indications, in Sweden 

and South Korea, of the positive 

impact of a strengthened copyright 

environment on curbing piracy and 

enhancing legitimate sales. 

Case studies in this report show 

improved music sales in those countries 

in 2009, though sustained action will be 

needed to maintain this progress. 

Digital piracy rose sharply on the 

agenda of all creative industries in 

2009. With the rapid advance of 

technology, games manufacturers, 

film and television producers and 

book publishers are now facing the 

same challenges felt by the music 

industry at the start of the decade. 

Simon Renshaw, artist manager, says 

“What I worry about is that we are 

heading into a world where copyright 

has no value and where there’s 

no incentive for anyone to provide 

patronage and support for the creators 

of intellectual property.” 

Consumer education 

Consumer education has a vital role 

to play, and the music industry is 

currently involved in more than 70 

awareness programmes across the 

world. It is clear however, that consumer 

education alone, while it has effectively 

raised awareness of the legal and 

ethical issues around unauthorised 

downloading, does not change 

consumer behaviour. Good legitimate 

music offerings and meaningful 

deterrence are vital in this process. 

Legislation, ISP cooperation 

The music industry and other creative 

sectors around the world are seeking 

to engage ISPs in curbing digital piracy 

on their networks. In most countries, 

this requires help from governments in 

establishing a consistent and effective 

response from the entire ISP community. 

The most widely considered approach 

so far is a graduated response model, 

involving escalating warnings to infringers 

culminating, as a last resort for those 

who refuse to stop, in he sanction of 

temporary account suspension. The 

graduated response is a proportionate, 

effective way to curb piracy. 

IFPI first called for ISPs to cooperate 

in a graduated response system in 

2005. Five years later, voluntary 

means have largely failed to progress. 

A number of governments however, 

including France, UK, New Zealand, 

South Korea and Taiwan, have enacted 

legislation to require such cooperation 

or are in the process of doing so. n 

“ 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 Hooding benefits are 

rich service providers, whose swollen profits perfectly mirror 

the lost receipts of the music business.” 

Bono, singer-songwriter, in the New York Times, January 2010 

7 

Executive Summary


The Diversification Of Business Models 

“ We are shaping our own future by finding new ways of getting music 

into people’s lives.” 

Lucian Grainge, Chairman and CEO, Universal Music Group International 

Downloads continue to grow 

A-la-carte download services account for 

the majority of online revenues and saw 

steady growth. Three key developments 

in 2009 were: the roll-out of more DRMfree 

services, continued growth in digital 

album offerings and the introduction of 

variable pricing. 

Music companies have expanded their 

licensing of DRM-free à-la-carte services 

internationally. Fans can now transfer 

their purchased music files to different 

portable players when they buy from 

virtually any online service. Digital album 

sales grew faster than single track 

purchases in many markets. Variable 

pricing, by which catalogue music is 

discounted relative to new top charting 

tracks, helps increase the conversion of 

track purchases into album sales. 

The launch of iTunes LP – a deluxe digital 

format – boosted demand for premium 

albums which account, on average, for 65- 

70 per cent of the sales of a major digital 

album release. Artists from Bob Dylan to 

Jay-Z are engaging fans in this new way. 

Premium album downloads often outsell 

regular versions. During the first week of 

sales through iTunes in Europe, the deluxe 

version of Michael Bublé’s Crazy Love out- 

sold the standard version by a ratio of 3:1. 

ISP and mobile partnerships 

Internet service providers (ISPs) 

are increasingly looking to become 

commercial partners of music 

companies. They can add value to 

the ISPs’ offers at a time when their 

traditional broadband market is close 

to saturation in many markets and 

consumer demand for 

content such as video 

is increasing network 

costs. Music and other 

entertainment content 

help ISPs reduce ‘churn’ 

and retain customers as 

well as generating new revenues. 

TDC’s PLAY service was the first 

ISP music service to 

launch. Today it offers 

TDC’s broadband, mobile 

and cable customers in 

Denmark unlimited music 

streaming from a catalogue 

of 6.1 million tracks at no 

additional cost. TDC’s online customer 

churn was reduced by 50 per cent, for 

those who used TDC Play. 

In the UK, home entertainment company 

Sky launched Sky Songs in October 

2009 offering consumers unlimited 

streaming of more than four million tracks 

with packages of 10-15 downloads per 

month. This new offering is powered by 

music service Omnifone. 

In Brazil, Terra Networks, part of 

the Telefonica Group, launched Sonora 

in 2006. The service offers unlimited 

music streaming through a “tethered” 

subscription service with a fee bundled 

into the ISP bill. In February 2009 Sonora 

launched a new service tier – 20 hours 

of music streams per month, free-toconsumer 

on an ad-supported basis. 

The new offer attracted more than three 

million users in less than one year. Mobile 

operators also increasingly offer addedvalue 

content. 

8 

Vodafone for example is active in more 

than 20 countries, offering both à-la-carte 

and unlimited subscription services. In 

April 2009 Vodafone Spain launched 

an unlimited music subscription service 

bundled with an overall mobile service 

which attracted more than 100,000 users 

shortly after launch. 

Music subscriptions bundled 

with devices 

Mobile handset manufacturers Nokia 

and SonyEricsson started offering 

unlimited music services bundled with 

mobile phones in 2008. The global 

reach of these players brings enormous 

opportunities. Nokia is the biggest 

mobile device manufacturer in the 

world selling more than 450 million 

phones every year. 

Nokia’s Comes With Music (CWM) 

expanded widely into international markets 

in 2009, launching in 11 countries. 

The service has enjoyed particular

“ The key for all of us in the 

industry is to continue to 

experiment, to be somewhat 

agnostic in our approach.” 

Ron Werre, President, EMI 

Music Services 

success in Latin America. In Mexico, 

there were 10 million downloads in the 

first six months of the service’s operation 

and Brazil is now CWM’s top-selling 

territory. “Comes with Music is a strategic 

move to transform the company from a 

handset manufacturer into an internet 

services company. Music is obviously an 

important pillar out of all the services that 

we’re launching”, says Adrian Harley, 

Nokia Music Manager, Brazil 

and Southern Cone. 

Other types of device partnerships 

include Dell’s bundling of the 

subscription service Rhapsody with its 

computers in the US and with Napster 

in the UK for a limited period. 

The rise of streaming services 

A key development in 2009 was 

the growth of advertising-supported 

services that offer music streaming at 

no cost to fans. The “upselling” of users 

to premium services is critical to the 

long-term success of these companies. 

Spotify is one of the highest-profile 

of such services. More than seven 

million users across six countries have 

signed-up to date. Unlimited streaming 

is free on a computer and is advertisingsupported. 

Portable access through a 

mobile application with no advertising 

is available for €9.99 a month. Spotify 

has reached an agreement with Swedish 

ISP TeliaSonera, allowing its customers 

to pay for the premium service on their 

broadband bill. 

Another service operating a similar 

model is Deezer, a web-based 

service which users can access on 

any computer without the need to 

download software. It offers music 

streaming and personalised web 

radios and has attracted more than 

16 million users to date, including 

10 million in France. Advertisingsupported 

models have shown some 

success in migrating users unwilling 

to pay for music and who have mainly 

used illegal file-sharing services. 

According to GfK, six out of 12 

Swedish users of Spotify reported 

in July they had stopped or cut 

down on their file-sharing activity 

since using the service. 

iTunes announced in late 2009 that 

it was purchasing Lala, in a move 

that industry commentators said could 

lead to the company becoming involved 

in the streaming market. 

Monetising music videos online 

Music video is a leading growth area 

in digital music, driven by the success 

of streaming services. According to a 

study by Jupiter Research in 2009, sites 

such as YouTube dominate digital music 

activity in Europe with nearly one-third of 

all internet users (31%) watching music 

videos online. 

In December 2009, Universal Music 

Group and Sony Music Entertainment 

partnered with YouTube and the Abu 

Dhabi Media Company to launch VEVO 

in the US and Canada. The service has 

also signed an agreement with EMI 

Music. The service is focused on the 

ad-supported distribution of professional 

music videos online through the VEVO 

channel within YouTube, through VEVO. 

com and other online destinations. In a 

separate move, Warner Music signed a 

9 

The Diversification Of Business Models 

deal with YouTube in September 2009 

that created a feature-rich experience 

for fans accessing music related-content 

from Warner Music artists, including a 

high-quality premium player, enhanced 

channels and links to artist websites. 

The agreement also allowed the record 

company to sell advertising alongside 

videos that use its music across 

multiple channels. 

Thomas Hesse, president, Global Digital 

Business, US Sales and Corporate 

Strategy, Sony Music Entertainment, 

says “VEVO was created to improve 

the experience for both customers 

and advertisers with a new premium 

environment dedicated to viewing 

professionally produced content.” 

Hulu is another service offering 

music videos and live concerts 

online. MySpace Music has also 

extended its service to launch 

MySpace Music Videos. 

Direct to consumer 

Labels also work to support artists in 

direct-to-consumer sales of music, 

merchandising and concert tickets. 

Warner Music started to take artist 

websites in-house in 2008 and now 

operates them for around a quarter 

of its European roster. In Spain, the 

company runs artist Alejandro Sanz’s 

official site, signing up around 80 

per cent of his fan club to premium 

membership for €38.99 a year. 

The site’s monthly unique user 

numbers soared by 300 per cent 

since Warner began to work with 

Sanz on it, with the artist blogging 

four or five times a day to help generate 

an active online community. n 

1/3: Nearly a third 

of European internet 

users watch music 

videos online

Lady Gaga Jason Mraz 

Digital Music Sales Around The World 

Music companies’ global digital revenues 

grew by an estimated 12 per cent in 

2009 totalling US$ 4.2 billion in trade 

revenues. Digital channels now account 

for 27 per cent of music sales, up from 

21 per cent in 2008 (IFPI). The music 

sector is generating far greater value from 

the online and mobile market than any 

other sector in the creative industries, 

with the exception of electronic games. 

Music companies’ revenues from digital 

channels are now proportionately more 

than double that of the film, newspaper 

and magazine industries combined. 

Despite this success, the increase in 

the music industry’s digital sales is not 

offsetting the sharp decline in sales of 

physical formats. Overall, global music 

sales fell for the tenth year running 

in 2009. Full year figures were not 

available at the time of going to press, 

but digital and physical global sales 

in the first half of 2009 were down 

12 per cent, excluding performance 

rights income (IFPI). 

In the largest digital music market, 

the US, within the space of eight 

years digital revenues have gone from 

practically zero to accounting for around 

40 per cent of the US music market 

(RIAA). iTunes is now the biggest music 

retailer in the US, accounting for 25 

per cent of the overall music market, 

followed by Walmart, Best Buy and 

Amazon (NPD Music Watch). 

Top 10 Digital Songs 2009 

ARTIST TITLE SALES 

Lady Gaga Poker Face 9.8m 

Global Digital Revenues Share 

35 

30 

25 

20 

15 

10 

Black Eyed Peas Boom Boom Pow 8.5m 

Jason Mraz I’m Yours 8.1m 

Lady Gaga Just Dance 7.7m 

Black Eyed Peas I Gotta Feeling 7.1m 

Taylor Swift Love Story 6.5m 

Beyoncé Single Ladies (Put A Ring On It) 6.1m 

Soulja Boy Tell’Em Kiss Me Thru The Phone 5.7m 

Kanye West Heartless 5.5m 

Britney Spears Circus 5.5m 

Source: IFPI. Chart includes online single tracks, audio and video mastertones, ringback tones and full track downloads 

to mobile. Period of 12 months to November 2009. Sales are rounded. Combines all versions of the same song. 

5 

0 

32% 

Games 

27% 

5% 4% 

2% 

Recorded music Films Newspapers Magazines 

Sources: IFPI, PWC Global Entertainment and Media Outlook 

10 

Black Eyed Peas

Taylor Swift 

In Asia, around a quarter of the music 

business is now composed of digital 

revenues, set against a backdrop of 

sharply falling physical sales (IFPI). 

Digital sales in China, Indonesia, 

South Korea and Thailand now 

account for more than half of all 

music sales. South Korea has seen 

the benefits of a stronger copyright 

environment and there has been 

strong growth in MP3 subscription 

services (see page 26). Japan, the 

biggest market in the region, was 

hit by mobile piracy and economic 

downturn, seeing CD sales fall by 

more than 20 per cent in the first 

half of 2009, while digital sales 

were flat. 

Strong downloading demand helped 

Australia become one of the few 

developed music markets to achieve 

the “holy grail” of overall growth in 

2009, as the rise in digital music sales 

offset a small decline in revenues from 

physical formats. Digital album sales 

nearly doubled in 2009, representing 

almost 8 per cent of overall album 

sales, and digital albums are proving 

especially popular in the early days 

after a title’s release (ARIA). Some local 

artist releases, for example those by 

Australian artists Eskimo Joe, Hilltop 

Hoods and Paul Dempsey, saw digital 

album sales of between 15 and 20 per 

cent of total first week sales. 

Europe continues to lag behind in 

digital adoption, with only around 

15 per cent of sales coming from 

digital channels. In 2009 however, 

Europe was the fastest growing region 

in terms of digital sales. 

A study by Jupiter Research in March 

2009 highlighted some reasons for 

Europe’s digital lag: 

n The impact of music piracy – there 

are 29.8 million frequent users of 

file-sharing services in the top five 

EU markets alone and other forms of 

piracy are growing. Trends indicate a 

north-south divide, with Italy and Spain 

showing considerably higher piracy 

levels. Paid digital music services have a 

fundamental problem in competing with 

widespread illegal downloading. 

n Europe’s higher taxation levels compared 

to the US, different royalty structures and 

a fragmented rights landscape makes 

pan-European licensing a resourceintensive 

and complicated process. 

n High-street retail consolidation started 

earlier in the US. This drove active 

music fans online earlier, both to 

online CD retailers such as Amazon 

as well as digital stores. 

n The $0.99 à-la-carte model has been 

better suited to the US compared to the 

fragmented European market given the 

comparatively low margins, which favour 

large players and economies of scale. 

Latin America closely follows Europe 

in terms of digital share, with nearly 

15 per cent of revenues coming from 

digital channels. Brazil is the biggest 

digital market in the region and saw 

the successful development of services 

including Nokia Comes With Music and 

Terra Sonora in 2009. Mexico saw the 

introduction of the iTunes store in August 

2009 – the first in the region. 

11 

Beyoncé 

Globally, single tracks crossed the 

1.5 billion mark for the first time, 

up an estimated 10 per cent on 2008. 

Digital albums grew an estimated 

20 per cent, double the rate of single 

tracks. Today, around 20 per cent 

of albums sold in the US are digital 

and around 15 per cent in the UK 

(RIAA, BPI). 

The best selling single track of 2009 

was Lady Gaga, selling a total of 

9.8 million units. By comparison, 

the best-selling digital single track 

in 2008, Lil Wayne’s Lollipop, sold 

9.1 million units and in 2007 Avril 

Lavigne’s Girlfriend sold 7.3 million 

units (IFPI). 

Global mobile music revenues fell in 

2009, hit by piracy, lack of operator 

support for music services in some 

markets and saturation of the 

mastertones sector. On the other 

hand, single track mobile downloads 

were stable and ringback tones 

continued to grow thanks to strong 

sales in the US, Japan and India. 

Music subscriptions continued, and 

are expected to grow, account for 

more than 5 per cent of digital sales 

in 2009 (IFPI). Services such as 

TDC PLAY, Nokia Comes With Music, 

Spotify Premium and Vodafone drove 

this growth. Despite still accounting 

for a modest share of overall digital 

revenues, advertising-supported 

revenues are also expected to 

show strong growth in 2009. n


In Profile: Pioneers Of Digital Music 

Music To The Household 

Neil Martin, Business Development 

Director, Sky Songs 

The UK home entertainment company Sky’s music 

service, launched in partnership with all major and 

many independent record companies in October 

2009, is the most high-profile tie-up to date 

between the music industry and an ISP. 

“Sky is synonymous with premium content and 

great hi-tech driven solutions. We’re also known 

for our pioneering work in launching and growing 

subscription services where people are happy 

to pay for content. We therefore had skills in 

the company that were relevant to launching a 

digital music service” says Neil Martin, business 

development director. 

Sky Songs is part of the company’s broader move 

to multi-platform delivery, which includes the 

launch of Sky Player on Xbox and mobile TV on the 

iPhone. “The way people use media is changing. 

A mainstream audience is now comfortable with 

enjoying content on different media – their phone, 

their PC and their TV.” 

The service offers music fans unlimited streaming of 

more than four million tracks and the opportunity to 

download an album or 10 individual tracks for £6.49 

per month or 15 tracks for £7.99 per month. Users 

have the option of signing up for one month only. 

“Subscription 

services that 

locked people 

into long 

contracts without 

the option of 

downloading 

were not popular. 

People thought after six months that they had 

nothing to show for the money they had spent. 

And who are we to determine how people should 

enjoy music? If people want to buy music in bursts, 

we want their business.” 

Sky has invested heavily in editorial support for the 

site. “You can’t just dump people in front of 150 years’ 

worth of repertoire and leave them to get on with it. 

You need to help people explore and discover new 

music otherwise they will be hit by choice paralysis.” 

“We understand this through our work in television, 

where schedulers provide choice that ensures people 

watch more than two or three of the 600 channels 

available on the Sky platform. With Sky Songs, 

editorial can lead people to 

explore certain genres or tracks. 

The other day, the most visited 

page on the service was a playlist 

of the greatest-ever funeral 

songs, something that was driven 

by a piece of editorial.” 

Sky believes the increased 

adoption of digital services will 

be driven by the quality of the 

user experience offered. “When 

we sold Sky Plus (a personal 

video recorder service), we didn’t 

sell the technology, we sold what 

it enabled you to do. Now it is in 

25 per cent of UK homes. You 

don’t sell bits and bytes, you 

sell the user experience. People 

enthused about Sky Plus to 

their friends at parties or 

down the pub. We want to 

generate such advocacy for 

Sky Songs because of the 

quality of the service.” n 

12

Replacing Piracy 

With Partnership 

Jonathan Benassaya, CEO of Deezer 

13 


Deezer is a France-based ad-supported music 

streaming service. It has made the migration from 

being unlicensed and illegal to being a valued 

partner to the music industry. “In the US, start-ups 

usually begin in a garage; in Paris my partner started 

out in the music business in my kitchen – launching 

a website called blogmusik.net” says Jonathan 

Benassaya. “He soon received letters from bodies 

representing rights holders saying the service was 

illegal and must be shut 

down. He did that and then I sat down with him and the 

rights holders to see if we could work out a way forward.” 

The result was Deezer, a licensed and legal website that 

users can access anywhere using a browser. The service 

offers on demand music streaming, web radio and a smart 

radio tool similar to Last.fm or Pandora. Once users have 

listened to their own playlist a number of times they tend to 

switch to web radio to find out about new hits or the smart 

radio tool to discover new tracks. Deezer also offers a free 

mobile application for its web radio service. For the ondemand 

portable feature users pay €9.99 per month. 

The company has gone from three people in August 2007 

to 45 people to date. “Our focus is on profitability instead 

of international expansion. That’s why we’ve done a huge 

job in France trying to optimise everything - from the 

music rights to the cost structure. We’ve grown from 

100,000 unique visitors to 16 million across Europe, 

including almost 12 million in France.” n


Spot & Identify 

Daniel Ek, CEO of Spotify 

Spotify today offers registered users free access 

to more than 6.5 million tracks to stream, while 

premium services enable fans that pay a monthly 

fee to listen to music on their mobile handsets 

and to strip away the advertising that supports 

the free model. 

“In 2006 when we started working on the project, 

the company was just me and a colleague. 

We quickly hired another four guys. When we 

launched in October 2008 we had around 40 

people on the staff. Right now, there are about 

110 people working for the company.” 

“When I launched Spotify, I felt there was an 

inconsistency between how people consumed 

music and the way the business model worked. 

We are now using technology to bridge a business 

problem and make it more accessible for 

consumers to get music. At the same time, 

the protection of the content is important so that 

the revenues derived flow back to the artists.” 

Ek believes that the digital music business in 

Europe can grow at least fourfold in the next 

few years. “We’ve been focusing on the user 

experience. Our aim has been to do something 

that consumers love and then figure out how to 

monetise it.” 

Around 65-70 per cent of the music accessed on 

Spotify is back catalogue rather than new releases, 

with the service functioning highly effectively as 

a music discovery tool. “Ultimately, it’s 

because the platform is so quick and 

it’s so easy to listen to whatever music 

you want within three seconds.” 

Spotify’s primary objective is to migrate 

illegal file-sharers to its service, shifting 

15-25 year old music fans to a legal 

model that puts money back into the 

creation of new music. The service is 

also attracting music fans over the age 

of 30 and this demographic has a much 

higher conversion rate from Spotify’s 

free service to its premium offering. 

“If you take one per cent of all the radio 

advertising and display advertising 

revenue and put it into the digital music 

market then you have the equivalent of 

16-20 per cent of the UK digital music 

market. So it’s not impossible to build 

an advertising-supported service that 

delivers revenues for the music industry, 

but ultimately it’s the mix between this 

model and paid models that will help 

grow overall revenue.” 

Spotify is planning international 

expansion. The company is partnering 

with tom.com, the biggest internet portal 

in China, which also has established 

partnerships with handset manufacturers 

and telecoms. “Chinese people are very 

used to paying for mobile 

content. That’s something 

that’s been proved over 

and over.” 

In the US, Spotify’s 

goal is to increase the 

number of subscribers 

to a music service 

by a factor of five. 

“This is obviously a huge 

task and might take a couple years to reach.” n 

14

The Pioneer ISP 

Tejs Bautrup, Music Manager, 

TDC Play 

TDC was the first ISP worldwide to offer a freeto-user 

music access service. Customers can 

access the service through their computer at 

home or their mobile phone if they are on the 

TDC network. 

By November 2009, the company reported that 

more than 140 million downloads had been 

made using the service, the equivalent of 2.5 

downloads a second since launch. The hundred 

most popular artists accounted for 35 per cent 

of all downloaded tracks and 50 per cent of the 

tracks available had been downloaded in the first 

year of launch. 

“The Danish market has a high rate of customer 

churn in the broadband market. TDC PLAY 

has allowed us to reduce our churn among our 

broadband customers.” 

33 15 


The company has seen competitors enter the 

market in Denmark, but these all offer standalone 

subscriptions for around US$14 per month, while 

the TDC service is free to customers and also offers 

unlimited streaming. “We think that the launch 

of TDC PLAY has had some impact on piracy in 

Denmark. A third-party survey last year suggested 

that 40 per cent of PLAY customers said they have 

stopped engaging in music piracy.” 

“We were the pioneers in offering this type of 

service for consumers and we are proud of that. 

We have had people from around the world asking 

about how it can be imitated. This is a genuinely 

new way of looking at the online music market.” n


A New Take On 

Music Videos 

Rio Caraeff, CEO Of Vevo 

VEVO is a new concept created 

in partnership between Google’s 

YouTube, Universal Music and 

Sony Music. The organisation has 

also signed a multi-year licence with 

EMI Music. With three of the four 

major record labels on board and 

partnerships with independent music 

companies including The Orchard 

and INgrooves, VEVO offers 85 per 

cent of the music videos available 

on the market and is looking to sign 

future deals with additional music 

companies. It aims to create a better 

music video experience for fans and 

a more attractive online environment 

for advertisers. 

“The idea behind VEVO is for music 

companies to be more responsible 

for their destiny. We’re not trying to 

protect old business models, we’re 

only focused on what’s best for the 

music lover. If we can do that then 

we will be interesting to artists, labels 

and advertisers. Doing things the old 

way is clearly not working. We think 

there’s a significant opportunity to 

build a large and global audience, 

perhaps the largest audience around 

music there’s ever been.” 

Music videos and related content are 

embedded in YouTube, but will also be 

available on VEVO’s own website and 

through many other platforms. There 

is a huge potential audience. Some 

450 million people a month worldwide 

visit YouTube and more than 60 per 

cent of them consume some form of 

music programming. The site became 

the largest music video network on the 

web when it launched in December 

and will roll-out to key territories 

worldwide this year. 

“Music videos are largely the same 

as they have been for the last 30 

years. They don’t reflect the transition 

from being primarily consumed 

on television, a linear medium, to 

the internet, which is a two-way 

communication platform.” 

The company is focused on 

advertising and integrated brand 

sponsorship. Caraeff brushes off 

fears that such revenue may not be 

available in tight economic times. 

“Online video advertising grew by 300 

per cent last year, with brands looking 

for more premium content than is 

currently available.” 

“We will be producing new original 

programming and we will be licensing 

in content that’s never been made 

available before. Music video will form 

the foundation of what is VEVO but it 

won’t end at music videos, it will just 

grow from there.” n 

16

From Handset 

Makers To 

Music Providers 

Tero Ojanpero, Executive VP 

Of Services, Nokia 

Nokia Comes With Music (CWM) was 

one of the most high-profile launches 

of 2008 and 2009 saw it roll out to 

13 countries around the world. 

“We are optimistic about the digital music business 

and how it can expand. We want to make music 

discovery as simple as possible and remove 

obstacles” says Tero Ojanpero. “CWM is a service 

that’s part of your handset – you get unlimited 

downloads and you keep them forever. That’s the 

special selling point, and there is no other service 

with these terms available in the marketplace.” 

A Legitimate Foothold 

In China 

Gary Chen, CEO Of Top100.cn 

China’s digital music landscape remains dominated 

by mass-scale copyright infringer Baidu and other 

“deep link” infringing distributors. However, a very 

small legitimate sector is battling to gain a foothold. 

Top100.cn is the streaming and downloading service 

behind the Google music search in China, launched 

in March 2009. The company aims its service at 

the 217 million online users in China that stream or 

download music illegally. “We are the first licensed 

service to really exploit this user base and take on the 

pirate services.” 

Gary Chen thinks he can take on pirate 

services by offering a better user experience. 

“We provide access to music for free in just two 

clicks, compared with the three clicks it takes on 

unlicensed sites. We offer 100,000 Chinese tracks 

alone, representing virtually all the local repertoire 

ever digitised and licensed.” 

17 


Brazil is the number one market for Nokia Comes 

With Music. By the end of the third quarter of 

2009, Comes With Music had claimed around 

10 per cent of the digital music market in Brazil. 

This success is partly put down to the fact that 

the phones are not sold there without premium 

CWM music service. Availability of licensed local 

repertoire is also important - Nokia secured a 

catalogue of six million tracks including 200 

Brazilian independents and more than 2,000 

international independent labels. 

Ojanpero says: “Each market is unique and 

you need to align different things: the service 

needs to be great, you need a great mobile 

device, a good approach to the market and 

channel support from the retailers and operators. 

Only by aligning all of those things can you can 

get a scalable model.” n 

Top100.cn is 

licensed by 

the majors 

and 10,000 

independent 

labels to make 

four million 

tracks available. 

The company 

currently 

facilitates five 

million music 

streams and downloads daily. 

“It is a labour intensive task to add extra tracks 

to the service. We have 60 full-time and 30 parttime 

staff working on this. We have to wait for 

clearance to use tracks and only distribute them 

when they are officially released. Pirate services 

do not operate under those restrictions.” 

The service places cost-per-click advertising and 

targets international brands that want to reach 

younger consumers in China, now the world’s 

second largest advertising market. n


Competing In A Rigged Market – 

The Problem Of Illegal File Sharing 

“ We can no longer invest in new artists in the way we would like.” 

Salvador Cufi, Chairman of indie label Musica Global 

Piracy – The impact on sales 

Music companies and legitimate music 

services are trying to build their online 

business in a rigged market deluged by 

unauthorised free content. The growth 

of illegal file-sharing has been a major 

factor in the decline in legitimate music 

sales over the last decade, with global 

industry revenues down around 30 per 

cent from 2004 to 2009. In virtually 

every country of the world, spending on 

recorded music has fallen since illegal 

file-sharing became widespread. 

All but a few of the independent surveys 

confirm that the net impact of illegal 

file-sharing is to reduce spending on 

legitimate music. Most academic studies 

exploring the dramatic fall in sales 

of recorded music conclude that the 

damage caused by illegal file-sharing 

is a major factor in the decline. 

These include Norbert Michael (The 

Impact of Digital File-Sharing on the 

Music Industry: An Empirical Analysis, 

2006), Rob & Waldfogel (Piracy on the 

High C’s, 2006) and Alejandro Zenter 

(Measuring the Effect of File Sharing 

on Music Purchases, 2003). 

A 2006 study by Professor Stan Liebowitz, 

File-Sharing: Creative Destruction 

or Just Plain Destruction? concludes: 

“The papers that have examined the 

impact of file-sharing can be categorised 

by result and by methodology. By results 

the classification is quite simple. There is 

one study (Oberholzer and Strumpf, 2004) 

that claims to find a zero impact but it 

has been frequently discredited. All the 

other studies find some degree of negative 

relationship between file-sharing and sales 

of sound recordings.” Research from 

Harris Interactive in 2009 among 3,400 

online consumers aged 16-54 in the 

UK highlighted that nearly one in four 

P2P file-sharers (24%) typically spend 

nothing on music, while also finding an 

overlap of legal and illegal downloading 

among some file-sharers. 

A Jupiter Research study in five 

European countries among 5,000 

internet users aged 15 and over in 2009 

found that, although there is an overlap 

between the habits of online music 

buyers and file-sharers, most illegal filesharers 

“do not buy music and are nearly 

half as likely as music buyers to buy CDs 

in a high street shop or from an online 

store.” The study also finds that the net 

effect of illegal file-sharing is negative. 

“Although it is possible that file-sharing 

functions as some sort of discovery tool 

for those digital music buyers that also 

file-share, it is reasonable to assume that 

their spend would be higher if they were 

not file-sharing. The overall impact of file 

sharing on music spending is negative.” 

The lure of free 

A separate body of research helps 

explain why illegal file-sharing is having 

this impact on consumer behaviour, 

confirming the main driver of piracy to 

be not better choice or quality, but the 

“lure of free”. Researchers GFK found 

that “because it’s free” was the main 

answer given among over 400 illegal filesharers 

in research unveiled in Sweden 

in July 2009. A study by Entertainment 

Media Research in the UK found that 

71 per cent of those who admitted they 

18 

increased their file-sharing activity 

in 2008 did so “because it’s free”. 

In Norway, research by Norstat in 2009 

also found the most cited reason for 

illegal downloading from P2P 

services was “because it’s free”. 

Further studies came to broadly 

the same conclusion in Japan 

and Belgium in 2009 (IFPI).

It is the “free-to-user” appeal of illegal 

file-sharing that creates its unfair 

advantage over legitimate music 

services, whose cost base, including 

payments to artists and copyright 

holders, cannot compete with the free 

illegal alternative. This, more than any 

other factor, explains why the growth 

of an innovative and entrepreneurial 

legitimate music sector is being stunted 

in the absence of an effective response 

to digital piracy. 

The impact on local talent 

Illegal file-sharing has also had a very 

significant, and sometimes disastrous, 

impact on investment in artists and local 

repertoire. With their revenues eroded by 

piracy, music companies have 

far less to plough back into 

local artist development. Much 

has been made of the idea that 

growing live music revenues 

can compensate for the fall-off 

in recorded music sales, but 

this is, in reality, a myth. 

* By the top 

music companies 

1 IN 4: 

P2P file-sharers 

typically spend 

nothing on music 

Live performance earnings are 

generally more to the benefit of 

veteran, established acts, while 

it is the younger developing acts, 

without lucrative live careers, who 

do not have the chance to develop 

their reputation through recorded 

music sales. 

Clear evidence of this impact can 

be seen in markets including France, 

Spain and Brazil. 

n In France, there has been a striking 

fall in the number of local repertoire 

albums released in recent years. 

In the first half of 2009, 107 

French-repertoire albums were 

released compared to 271 in 

the same period six years earlier. 

New releases in France have 

suffered the most, falling by nearly 

two thirds in the last seven years, 

from 91 in the first half of 2002 to 

35 in the same period of 2009. 

Overall investment in marketing 

and promotion by the French 

music industry fell nine per cent 

in the first six months of 2009. 

At the same time 25 per cent of the 

French internet population currently 

download music illegally from P2P 

networks or other sources on a monthly 

basis (Jupiter Research, 2009). 

n In Spain, a culture of state-tolerated 

apathy towards illegal file-sharing 

has contributed to a dramatic slump 

in the music market. Spain has the 

worst online piracy problem of any 

major market in Europe. Today, P2P 

usage in Spain, at 32 per cent of 

internet users, is more than double 

the European rate of 15 per cent 

19 

Competing In A Rigged Market 

(Jupiter Research, 2009). 

The Spanish legitimate music 

market is now only one third of its 

size in 2001 and fell by around 

18 per cent in 2009 alone. Local artist 

album sales in the Top 50 declined by 

65 per cent between 2004 and 2009. 

n In Brazil, music sales fell by more 

than 40 per cent between 2005 and 

2009, with a disastrous impact 

on investment in local repertoire. 

In 2008 there were only 67 full 

priced local artist album releases 

by the five biggest music companies 

in Brazil – just one tenth of the 

number (625) a decade earlier. 

This has been particularly 

damaging in a market where 

70 per cent of music consumed 

is domestic repertoire. 

New forms of piracy emerge 

Although P2P file-sharing remains the 

most damaging form of piracy due to 

the volume of files shared by users, 

the last two years have seen a sharp 

rise in non-P2P piracy, such as 

downloading from hosting sites, 

mobile piracy, stream ripping, instant 

message sharing and downloading 

from forums and blogs. 

According to a study by Jupiter 

Research in 2009, about one in 

five people across Europe’s top 

markets (21%) are engaged in 

frequent unauthorised music-sharing. 

P2P piracy is still the biggest single 

source of this, with around two-thirds 

of music sharers file-swapping on 

P2P networks despite the increase 

in non-network file-sharing. 

Research by Harris Interactive in 

the UK shows that, although P2P 

piracy is the single biggest problem 

and did not diminish in 2009, the 

illegal distribution of infringing music 

through non-P2P channels is growing 

considerably. The research showed the 

biggest increases in usage for overseas 

unlicensed MP3 pay sites (47%) and 

newsgroups (42%). Other significant 

rises included MP3 search engines 

(28%) and forum, blog and board 

links to cyberlockers (18%). n


‘ Climate Change’ For All Creative Industries 

“ We are in danger of creating a world where nothing appears to have any value at all, 

and the things that we make...will become scarce or disappearing commodities.” 

Stephen Garrett, Chief Executive, Kudos 

Piracy’s impact on the 

creative sector 

For years digital piracy has been a 

problem most associated with music. 

Today, however, creative industries 

including movie, publishing and 

television, regard “monetising” the 

online world and addressing digital 

piracy as their greatest challenges. 

“The music industry was hit first, but 

now with increased broadband you 

have a situation where all the creative 

industries are at a tipping point” says 

Simon Renshaw, Los Angeles-based 

manager of a long list of major artists 

including the Dixie Chicks. “You can see 

it in the collapsing DVD market; you can 

see what’s going on in TV, newspapers 

and magazines. And now we’re seeing 

the same thing in the book publishing 

business and you’re going to start 

seeing piracy of novels and reference 

books.” Renshaw passionately believes 

that the stakes involved go far wider 

than the music industry. “What I worry 

about is that we are heading into a 

world where copyright has no value and 

where there’s no incentive for anyone to 

provide patronage and support for the 

creators of intellectual property.” 

He says the world has transformed, 

for both young and established artists 

and the economy of jobs and activity that 

surround them. “We’re dealing with this 

every week – everything that you can afford 

to do around a record is greatly reduced 

and that also means that everything that 

you’re spending with video companies, 

with hotels, with airlines, with graphic 

artists, make up - everything’s reduced, 

20 

The cost of digital 

piracy for creative 

industries 

n Major film release Wolverine 

was illegally downloaded 

100,000 times in 24 hours 

n Six out of 10 music filesharers 

in the UK also illegally 

download films 

n Illegal distribution of TV 

content is growing faster than 

music and movie piracy

maybe by 70 per cent. The money is 

not there anymore. And if there are no 

rock stars the whole industry and the 

people working in it suffer.” 

Movie and TV piracy grows 

The movie industry is also seeing the 

impact of digital piracy. The MPA, 

representing movie studios, estimates 

that illegal streaming and 

film downloads now account for 

40 per cent of its piracy problem 

by volume. Case studies around 

blockbuster movies show how top films 

now suffer from the same digital piracy 

problems as popular albums. Pre-release 

copies of Wolverine 

were downloaded 

100,000 times in 

24 hours after a leak 

in April 2009. In 

2008, seven million 

copies of Batman: 

Dark Knight were 

downloaded on 

BitTorrent. This has 

a ripple effect across 

the industry, on 

investment 

and jobs. In the US 

alone, the film 

and television 

industries are estimated to employ 2.5 

million people, according to MPA. 

The problem is highlighted by Judy 

Craymer, producer of both stage and 

film versions of Mamma Mia, the UK 

film industry’s biggest ever box office 

success. “It is clear that the technology 

that has so badly damaged the music 

business is now fast catching up with 

movies and TV – and it’s a frightening 

prospect. Creative film making needs 

the revenues that come from sales of 

works – but these are now being eroded 

as they are downloaded rampantly 

across the world. There is virtually 

no perception of risk in this activity, 

even if most people know, as they 

do, that stealing other people’s work 

is illegal and wrong.” 

The television industry also raised 

the alarm over digital piracy in 2009. 

Stephen Garrett, executive chairman of 

television company Kudos, says mass 

downloading of his company’s shows, 

such as the acclaimed series Spooks, 

is threatening the future of TV and film 

companies. He calls this a moment of 

“climate change of the entertainment 

industries” across the creative sector. 

“We are nurturing a generation who 

are growing up to believe not only that 

everything is free 

but that everything 

should be free. 

And the problem 

with that is what 

we do - making 

music, television 

programmes and 

films - is incredibly 

expensive. We 

are in danger of 

creating a world 

where nothing 

appears to have 

any value at all, 

and the things that 

we make, which do have real value, 

will become scarce or disappearing 

commodities. And that’s also threatening 

hundreds of thousands of jobs – 

not the fabulously wealthy or 

the fat cats – these are drivers, 

electricians, carpenters, 

ordinary working people. 

The combination of piracy 

and recession is a pretty potent 

job killer.” 

Garrett sees the solution as a 

combination of “monetisation” and 

legislation engaging ISPs in curbing 

piracy. “The music industry blazed an 

impressive trail and is probably ahead 

of all the creative industries in terms of 

finding ways of monetising the products 

of their labours. That said, it clearly has 

an enormous piracy problem. So we 

have to do our best to plug the gaps 

and curtail illegal activity.” The impact 

of film piracy is being felt worldwide. 

In the UK alone, a 2009 report by 

21 

‘Climate Change’ For All Creative Industries 

“ We have to find a way of funding our future and not pretend 

that new revenue models are magically going to rescue us as 

the world of recorded music is destroyed by piracy .” 

Björn Ulvaeus, singer-songwriter, formerly of ABBA 

US$1.4 

TRILLION: 

The value of the 

entertainment and 

media industry 

in 2009 (PWC)


Simon Renshaw 

“ Unless we engage the ISPs 

in assisting in the protection 

of rights, then the value 

of copyright is going to 

completely disappear.” 

Simon Renshaw, LA-based 

artist manager 

Judy Craymer 

Stephen Garrett 

Oxford Economics estimates losses 

to film piracy at £600 million and 

predicted that tackling the problem 

would create nearly 8,000 jobs and 

more than £150 million in tax revenues. 

Television programme piracy is also 

proliferating. Commercial television 

producers and networks need to recoup 

their substantial investment through 

advertising revenue, international 

syndication and DVD sales. Falling 

advertising revenues combined with 

digital piracy are threatening their ability 

to do so. When Fox aired the premiere 

of the last season of Prison Break in the 

US in April 2009, the illegal downloads 

of the show at 1.14 million were virtually 

on a par with the number of legitimate 

viewers in the 18-49 age bracket. 

Book piracy threat 

Book publishers are also grappling with 

the challenge of developing new business 

models for the digital era. Academic book 

piracy has been a problem for publishers 

for some years. Now it is also seen as 

major threat to the much larger consumer 

book sector. In 2009 the ebook, led by 

Amazon’s Kindle, was rolled out for the first 

time around the world. Digital revenues 

from ebook sales still account for less than 

1 per cent of the publishing sector, largely 

driven by the US, but are rising sharply. 

Publishers say the market for digital books 

may develop far more slowly than for digital 

music, but they agree that the breakdown 

of technological barriers to distribution 

and the relatively small size of the files 

make book piracy a far greater threat 

than before. 

Simon Juden, chief executive of the 

Publishers Association, notes that 

piracy is already a real and present 

danger to the sales of high profile titles. 

“The biggest release of last year was 

Dan Brown’s The Lost Symbol and 

the pirated version was out there 

on the internet very, very quickly. 

We were able to get illegal copies 

taken down, but it is tremendously 

damaging because it was the most 

valuable property for the publishing 

business in 2009.” 

Juden notes that such piracy 

undermines the investment needed to 

22 

create a legitimate digital publishing 

sector. “Developing online services 

requires investment in new business 

models and one of the major threats of 

piracy is that it takes away the chance 

of being fairly rewarded for the financial 

risk of backing new ventures.” 

George Walkley, head of digital for 

the Hachette UK Group, a division of 

Hachette Livre, the French-based global 

publishing group, says: “Digital piracy is 

a growing problem for publishing, and 

one which Hachette takes very seriously. 

It affects our authors, across the range 

of our businesses and subject areas. 

We realise that there are different ways 

to address the problem, but what is key 

is that the creative industries cooperate 

to lobby government and other 

stakeholders for effective measures 

to reduce illegal file-sharing.” 

Calls for ISP action 

Creative industries are looking to ISPs 

to address this problem. Renshaw says: 

“They are like the utility companies of 

the 21st century – colossal industries 

which have the right and the ability 

to provide all this content. But unless 

we engage the ISPs in assisting in the 

protection of rights, then the value of 

copyright is going to disappear.” 

Judy Craymer applauds the UK 

government proposals for anti-piracy 

sanctions. “If our producers, directors, 

actors and crews are to maintain the 

success we have achieved through 

movies like Mamma Mia, we are going to 

need to see concrete action to deal with 

the problem. And we do not have the 

luxury of time.” 

For Kudos, Stephen Garrett says the 

French HADOPI law introducing a 

graduated response has set an example 

internationally. “The French law is 

absolutely right. It’s all very well to talk 

about consumer rights and people’s 

rights to the internet, but equally we, the 

content owners and creators, have the 

right to be rewarded for our work. I think 

that squeezing someone’s bandwidth and 

ultimately cutting off that tiny percentage 

who persist seems to be quite a fair 

balance between competing rights.” n

Case Studies 

From The 

Coal Face 

The Indie Label 

Keith Armstrong is the co-founder 

of Kitchenware Records, based in 

the northern UK city of Newcastle. 

Kitchenware is a development label, 

often signing artists at the very 

beginning of their career. 

“When we were starting out back 

in the early 80s,” recalls Armstrong 

“there was a campaign running 

called ‘Home taping is killing music’. 

Our slogan was ‘Home taping broadens 

minds’. But illegal file-sharing is in 

a completely different league and is 

devaluing and cheapening the way 

people perceive music.” 

Armstrong says that for many of 

his acts, the revenue coming in from 

their first sales is essential to help 

them sustain their career. “That revenue 

is recycled straight away into building 

their profile and taking them to the 

next level, but it is disappearing.” 

He cites Editors as an example of an 

act that has proved highly successful 

in the UK and Europe and seems 

popular in the US but is unable to 

establish sales there. “The guys regularly 

sell out plenty of four thousand seat 

venues on both coasts, but their albums 

only sell 50,000 copies. They seem at 

the mercy of the piracy culture.” 

Sirens, an all-girl dance act, have a very 

different profile, but suffer from the 

same problem. “We’ve promoted them 

in the dance clubs and their first singles 

Piracy is hitting Kitchenware’s acts Sirens and Editors 

Teemu Brunila 

“ We live in a world where 

€1 is considered extravagant 

for a music download.” 

Teemu Brunila, singer-songwriter 

have done really well in the dance 

charts, but I’ve seen online that there 

have been 15,000 illegal downloads of 

their next single that hasn’t even begun 

to play on the radio yet and won’t be 

released until next year. Not every one 

of those downloads was probably a lost 

sale, but even one in three of them 

would have bought the girls some vitally 

needed tour support.” 

Armstrong says: “I used to work in HMV, 

and if someone came in and started to 

steal records we’d chase them down the 

street. Uploaders are doing essentially 

the same thing as those shoplifters. My 

artists are being hit. Editors and Sirens 

both backed Lily Allen when she took a 

stand for new artists last year and said 

this had to stop.” 

The Artist-Songwriter 

Teemu Brunila is a Grammy Awardwinning 

singer-songwriter from Finland 

and former lead vocalist of The Crash, 

‘Climate Change’ For All Creative Industries 

one of the country’s leading pop-rock 

bands. The Crash released four albums 

in 10 years and sold records in 30 

countries between 1999 and 2009. 

“The Crash was an appropriate name,” 

says Brunila ruefully “as we lived 

through the great crash of the music 

business.” Some critics may suggest 

that the band should not have suffered 

as increasing live revenues would have 

offset falling record sales, but Brunila 

dismisses that view. “90 per cent of our 

yearly income as a band came from 

copyright channels, not live, despite the 

band touring 20 countries. Make no 

mistake, in a world with no copyright 

protection, freedom of information will 

become freedom from information 

because no one will do a damn thing 

creatively. Song writing would cease to 

be a profession.” 

He cites an example. “One year the 

band played Valmiera, the biggest 

music festival in Latvia. We drove in 

from the airport and heard our songs 

on the radio. We headlined the festival 

and the 10,000-strong crowd roared 

out our songs. When we came off stage 

I asked our label representative how 

many records we had sold in Latvia. The 

answer was like a slap in the face. 200.” 

As he now concentrates on song 

writing, Brunila is aware that many 

in his profession have been badly 

squeezed by falling music sales. 

“The average songwriter in Finland earns 

€1,600 a year before tax, discounting 

performance fees. Just 200 songwriters 

earn more than €20,000 a year. That has 

come about because we live in a world 

where €1 is considered extravagant 

for a music download, but a couple of 

euro is considered reasonable for 

a Starbucks coffee.” n


Graduated Response – A Proportionate, 

Preventative Solution 

“ In the digital market place we need both the carrot and the stick – and that includes 

legislation to help people move from pirate services to the legitimate ones.” 

Daniel Ek, CEO and founder, Spotify 

The graduated response approach 

has become the focus of the music 

industry’s campaign for action 

by ISPs to address digital piracy. 

One of the key benefits of a graduated 

response system is its effectiveness 

and proportionality compared to the 

alternative approach of mass legal 

actions and prosecutions 

under existing laws. 

Under this system, the holders of 

accounts identified by rights holders 

as being used for infringement are 

sent notices by their ISP. The notice 

would advise them to stop infringing 

and suggest the use of a legitimate 

service that respects copyright and 

rewards rights holders. An escalating 

series of warnings would result, as 

a last resort, in temporary internet 

account suspension for those few 

who refuse to stop. The system would 

protect the anonymity of individuals 

and would essentially implement 

the standard terms of ISP subscriber 

agreements, while conditioning 

continued service upon compliance 

with the law, particularly copyright. 

Consumer surveys in different 

countries show that the graduated 

response would effectively influence 

consumer behaviour while affecting 

only a small minority of people. 

n IPSOS research, conducted in France 

in May 2008, found that 90 per cent 

of consumers would stop illegally 

file-sharing on receipt of a second 

warning from their ISP as part of a 

graduated response programme. 

n According to a 2009 study by 

Entertainment Media Research, 

45 per cent of consumers who 

downloaded music illegally 

would definitely stop if a 

graduated response model 

was implemented. A further 

35 per cent claimed they would 

probably stop. 

n Research conducted for the New 

Zealand Federation Against Copyright 

Theft (NZFACT) in 2008 found that 

70 per cent of internet users in the 

country aged between 15 and 30 

would stop file-sharing copyright 

infringing movies if their ISP could 

suspend or terminate their internet 

account for breaking the law. 

n A study by Harris Research in the 

UK in 2009 found that merely being 

familiar with copyright law alone is 

not a deterrent to illegal file-sharing. 

The study suggested 23 per cent 

of the general population in the UK 

illegally file-shares infringing music, 

while 33 per cent of those “very 

familiar” with the law illegally fileshare 

music. 

Progress With Graduated 

Response Around The World 

Graduated response legislation 

arrived on the statute books in 2009 

with France, South Korea and 

Taiwan passing laws that turned 

the concept into reality. Other 

governments, such as the UK and 

New Zealand, are proceeding with 

the introduction of legislation. 

24

The government of France was an 

early champion of graduated response 

legislation, understanding it as an effective 

way to protect the creativity of French 

artists and local culture. 

France’s legislation was 

enacted in October, 

establishing a new 

administrative authority 

(HADOPI) that will 

require ISPs to send 

warning notices to online 

copyright infringers. 

After a second warning, 

HADOPI will transfer the 

files of repeat infringers 

to the criminal courts, 

where a judge will be 

empowered to order the 

suspension of infringers’ 

internet access for up 

to one year, as well as 

to impose a full range of 

criminal penalties. 

The graduated response 

system is expected to 

start functioning in early 

2010, as soon as some 

implementing decrees 

have been adopted. 

Given the development in a number 

of EU Member States of legislation to 

tackle file-sharing and other forms of 

piracy, the European Commission is 

considering whether to table framework 

laws in order to provide guidance to the 

member states. One option would be 

for the Commission to come forward in 

2010 with proposals to strengthen the 

EU Enforcement Directive. 

In Asia, South Korea and Taiwan 

have passed legislation establishing 

graduated response processes for 

repeat infringement that can culminate 

in account termination. 

Legislation to tackle online copyright 

infringement was also announced in 

November in the UK, following the 

government’s Digital Britain consultation. 

The proposal establishes a graduated 

response leading to possible sanctions 

that could include suspension of repeat 

infringers’ accounts. ISPs would notify 

subscribers whose accounts have been 

reported to be infringing, and keep 

records on an anonymous basis. 

The government could then oblige 

ISPs to implement technical measures 

or temporary account suspension for 

Industry Action On Pre-Release Piracy 

While ISP cooperation offers a potential solution to massscale 

peer to peer (P2P) digital piracy the music industry 

is extremely active in tackling the separate and highly 

damaging problem of pre-release piracy. Pre-release tracks 

and albums leak days or weeks before official release. 

IFPI’s London-based anti-piracy team works closely with 

member music companies both to help prevent leaks 

and to limit the proliferation of illegally distributed content 

around the world. In 2009 IFPI’s internet anti-piracy unit 

was merged with the organisation’s physical/forensic antipiracy 

operations. 

Jeremy Banks, IFPI’s director of anti-piracy, heads the new 

combined team. He says: “Record labels are more aware 

than ever that the protective measures they take in the days 

around an album’s release are absolutely crucial to whether 

the album will realise its full market potential. You can count 

the cost in terms of lost returns to artist and record company 

from the moment the first copy leaks out on to the internet.” 

25 

Graduated Response 

repeat infringers. In New Zealand, 

the government has concluded its 

consultation on legislation to introduce 

graduated response and is expected to 

present a bill to Parliament early in 2010. 

A different path to graduated 

response has been taken in Ireland. 

The country’s largest ISP, Eircom, 

agreed to introduce such a system 

in a settlement with the local 

recording industry. 

There are government sponsored 

discussions taking place between 

ISPs and content industries in many 

countries. In Germany, the Ministry 

of Economy is sponsoring meetings 

to include discussions on graduated 

response, new business models and 

education. Other countries involved in 

similar discussions include Australia, 

Brazil, Hong Kong and Japan – 

all of which are closely monitoring 

developments elsewhere. 

In some countries, notably the US, 

private deals have been struck 

between some individual rights 

holders and ISPs that incorporate a 

commitment by the ISP to put in place 

a system of graduated response. n 

IFPI’s anti-piracy team tracks leaks of tracks and 

albums released throughout the world. It searches 

blogs, forums and websites as well as P2P networks 

and also works with legitimate online services, 

such as YouTube, to ensure copyright infringing 

content is removed. The number of infringing links 

removed by IFPI rose from three million in 2008 to 

more than five million in 2009. This online focus 

is complemented by continuing work to tackle 

commercial physical music piracy, which is 

sometimes linked to online infringement. 

One of the most high-profile pre-release leaks of 2009 

was the posting of Leona Lewis tracks online following 

a ‘hack’ of an internet account at her record company. 

Simon Cowell, the managing director of Syco Records, 

called in the police and industry investigators who 

traced the origins of the ‘hack’ and the leak to sources 

in North America and Europe. n

South Korea – Legislative Change Combined 

With New Services Helps Boost Sales 

South Korea is an example of a country 

where improvements to the legal 

environment, combined with a range 

of legitimate offerings, appear to have 

contributed to a marked increase in 

legitimate music sales and revived 

investment in local music. 

Digital music came to South Korea very 

early in the decade, with digital sales 

overtaking sales of physical formats 

as early as 2006. In the early stages, 

however, legitimate digital services were 

hit by high rates of piracy which also 

accounted for falling CD sales. 

However, since 2007, South Korea 

has seen a steady recovery against 

the backdrop of a series of legislative 

changes and legal actions that have 

significantly strengthened the protection 

of music rights holders in the country. 

In the first half of 2009, the government 

began to publicise its new graduated 

response law, which became effective 

in July, and music sales increased 

by 18 per cent, with digital sales up 

by 32 per cent in the same period 

in 2008. Digital sales grew by 53 per 

cent in the first nine months of 2009. 

CD sales also rose in 2009 for the 

first time in five years, mostly driven 

by local K-pop. 

South Korea’s copyright landscape 

started improving in 2007 after two 

major infringing services, Soribada 

and Bugs, which had been subject to 

legal actions, turned legitimate. Also in 

2007, South Korea became one of the 

LOCAL 

REPERTOIRE: 

Record companies 

report increasing 

investment 

first countries in the world to require 

P2P file-sharing operators to take 

measures to block illegal distribution of 

copyrighted works on request from right 

holders. In 2008, a new government 

tabled legislation allowing authorities to 

order ISPs to warn infringing users and 

suspend accounts after three warnings. 

Authorities were also given the power 

to suspend infringing message boards, 

blogs and forums following warnings. 

The new graduated response law 

was passed in April 2009 and became 

effective in July. Public awareness around 

26 

the introduction of the law appears to 

have had a significant deterrent effect. 

Preliminary research by the South Korean 

government suggests consumers are 

aware of and are being influenced by the 

new law. In an indicative survey based on 

1,000 interviews, 45 per cent said they 

were illegally downloading less content. 

Helped by this improved environment, 

South Korea’s legitimate music services 

and physical retailers are seeing 

encouraging revenue growth. At the 

same time, record companies report 

increasing investment in local repertoire 

which has further boosted the market. 

Alongside the action taken by the 

government, 2008 was also the year 

that legal unlimited MP3 subscription 

services offering a wide range of 

domestic and international repertoire 

took off. Today, major players like 

Soribada and M.Net Media, all offer 

unlimited MP3 subscription services. 

Consumer take-up of these services 

has been robust. Soribada now has 

300,000 paying subscribers, compared 

to 700,000 subscribers in its previous 

illegal format. M.Net Media and Neowiz 

Bugs have attracted 350,000 and 

320,000 subscribers respectively. n

Sweden Sees Overall Music 

Revenues Soar – What Went Right? 

The Swedish market showed hopeful 

signs of growth in 2009, although 

it remains to be seen if the results 

will become a long-term trend. 

Against a backdrop of largely declining 

sales across Europe, the music market 

in Sweden was up by 10.2 per cent in 

2009. Growth was driven by an 98.6 

per cent increase in the digital market 

and a 1.9 per cent rise in physical 

format sales. 

Sweden’s resurgence appears to 

show a combination of the “carrot” 

of music offerings and the “stick” of 

new enforcement legislation. Digital 

sales growth in 2009 was driven 

predominantly by iTunes and Spotify, 

with some music companies seeing 

their digital revenues double in 2009. 

Spotify launched in Sweden in October 

2008 and within a year reached 17 per 

cent of the Swedish population. 

These events have not been driven by 

the market alone, however. Sweden has 

also seen a strengthening of the legal 

environment in 2009, with enormous 

publicity around both the implementation 

of the IPRED anti-piracy law and the 

ruling against the world’s largest illegal 

BitTorrent tracker, The Pirate Bay. 

“Many people are asking - what went 

right in Sweden this year?” says Jonas 

Sjöström, head of independent label 

Playground Music and chairman 

of Swedish independent labels body 

SOM. “This kind of growth is achievable 

“ There is now some positive 

news but our whole sector 

is still at risk.” 

Jonas Sjöström, Playground Music 

when you have a combination of good 

user-friendly digital services and a 

deterrent response to piracy. Of course, 

this has to be just the start. The law in 

itself is not going to be a deterrent in 

the long run unless it is enforced. We 

also need more support for user-friendly 

services, more investment from Swedish 

companies in local repertoire and 

more government pressure on ISPs 

to take their responsibility for curbing 

piracy. Sweden’s independent labels 

have been extremely damaged by 

illegal file-sharing in the last few years. 

There is now some positive news but 

our whole sector is still at risk, and we 

have a big fight in front of us.” 

27 

Sweden’s IPRED law came into effect 

on the 1st April 2009. Based on the 

EU Enforcement Directive, it gave 

copyright holders the right to obtain 

the name and address of copyright 

infringers from ISPs. Evidence indicates 

the law had a strong impact on music 

users in the short-term. Research by 

GfK in June 2009 found that 60 per 

cent of infringing file-sharers had 

stopped or reduced their activity 

as a result of the introduction of 

the IPRED law. However, piracy 

levels in Sweden are believed to 

have risen again since then, 

underlining the need for sustained 

enforcement and ISP cooperation. 

Spotify’s founder and chief executive 

Daniel Ek believes “carrot and stick” 

are crucial to Sweden’s success. 

“In Sweden, the most important 

lesson is the public recognition 

of the problem. Most people now 

acknowledge that file-sharing 

unlicensed music is illegal – it’s 

not OK and it’s not something that 

you should do, especially not when 

there are legal services that you can 

use instead.” n

The World Of 

Legal Music 

Services 

The featured list of legitimate 

digital music services appears on 

the Pro-music information resource 

(www.pro-music.org). This is the most 

comprehensive up-to-date directory of 

the world’s legitimate music websites. 

Pro-music is endorsed by an alliance of 

organisations representing international 

record companies (majors and 

independents), publishers, performing 

artists, music managers and musicians 

unions. The list numbers around 400 

legitimate services in 60 countries. 

ARGENTINA 

BajáMúsica 

Cyloop 

Faro Latino 

Personal Música 

Sonora 

Ubby Música 

AUSTRALIA 

199 Songs 

3 Mobile 

Bandit.fm 

BigPondMusic 

DanceMusicHub 

Getmusic 

iTunes 

Jamster 

MP3.com.au 

Music Station 

Myspace Music 

Nokia Comes With Music 

Nokia Music Australia 

Optus 

Vodafone 

YouTube 

Zooloader 

AUSTRIA 

3MusicStore 

7digital 

A1 Music 

AmazonMP3 

DG Web Shop 

eMusic 

Finetunes 

iTunes Austria 

Jamba 

Ladezone 

Last.fm 

Musicbox 

Musicload 

Mycokemusic 

MySpace 

Nokia Music Store 


Preiser 

SMS.at 

AUSTRIA CONT. 

Soulseduction 

Telering 

T-Zones 

Weltbild 

YouTube 

Zed 

BELGIUM 

7digital 

Belgian Music Online 

Celldorado 


Fnac 

Hysterias 

iTunes Belgium 

Jamba 

La Mediatheque 

Legal Download 

Mobistar 

MP3tunes 

PIAS shop 

PlayNow Arena 

Proximus (Vodafone 

Live) 

Studio 100 MP3 shop 

BRAZIL 

Baixa Hits 

Claro 

Coolnex 

CTI Movel 

Deckpod 

Esom 

Huck_00 

iMusica 

iToc 

IWFC Net Music 

MegaOmni Music 

Mercado da Musica - 

Transamerica 

MSN Music Store 

MusIG 



Oi 

Som Livre 

BRAZIL CONT. 

Sonora 

TIM Music Store 

Universal Music Loja 

Universal Music Mobile 

UOL Megastore 

Vineyard Music 

Warner Music Store 

Yahoo! Music 

YouTube 

BULGARIA 

4fun 


M.Dir.bg 

mp3.bg 

MTel Music Unlimited 

Musicspace 

Novialbumi 

Vmusic 

CANADA 

7digital 

Bell Music Store 


iTunes Canada 

Jamster 

Napster Canada 

Puretracks 

Telus 

Ur Music 

Vevo 

CHILE 

Bazuca 

Claroideas 

Cyloop 

Entel-Napster Mobile 

Mall Music 

Mimix 

Portal Disc 

Wapmanía 

Wow 

CHINA 

163 

9Sky 

9You 

China Mobile 

Douban 

Kuwo 

Perfect World 

QQ 

Sina 

Top100 

COLOMBIA 

Codiscos 

Cyloop 

ETB Musica 

Ideas Comcel Music 

Store 

Supertiendo Movistar 

Musica 

Tigo 

COSTA RICA 

Cyloop 

CROATIA 

Cedeterija 

Fonoteka 

CYPRUS 


28 

CZECH REPUBLIC 

Allmusic 


i-legalne 

Nokia 

O2 Active 

Stream 

t-music 

Vodafone 

YouTube 

DENMARK 

3music 

Bilka Musik 

Box 

CD Skiven 

CDON Danmark 


Digidi 

EL Giganten 

Getmore 

GUCCA 

Hollywood Express 

Inpoc (Aspiro) 

iTunes Denmark 

MTV Music Shop 

Netmusik.dk 

Optakt 

PlayNow Arena (Sony 

Ericsson) 

Prefueled 

TDC Play 

TDC Musik 

Telia 

The Voice 

TouchDiva 

ECUADOR 

Cyloop 

EGYPT 

Mazika 

Mazzika Box 

ESTONIA 


FINLAND 

7digital 

City Market CM Store 

DNA Musiikkikauppa 

download.MTV3.fi 

Download.NetAnttila 

Downloads.cdon.com 


iTunes 

Meteli.net 

musiikki.gigantti.fi 



Nokia Musiikkikauppa 

NRJ Kauppa 

NRJ Kauppa Mobile 

Playnow Arena 

Poimuri 

Pop City 

Sonera Music Player 

Spotify 

Store.radiorock.fi 

Tune Download Shop 

WAP Funman 

FRANCE 

7digital 

airtist 

Amazon 

Beatport 

Beezik 

Cultura.com 

FRANCE CONT. 

Deezer 

E-Compil 


FnacMusic 

iTunes 

Jamba 

Jamendo 

JIWA 

Last.fm 

musicMe 

Musiclassics 

Neuf Music 

Nokia 

Orange Music 

Qobuz 

SFR Music 

Spotify 

Starzik 

Virgin Mega 

YouTube 

Zed 

GERMANY 

7digital 

Amazon MP3 

AOL Musik 

Beatport 

Concert Online 

Deezer 

DG Web Shop 

elixic.de 


e-Plus unlimited 

eventim music 

Finetunes 

Freenet 

iMesh 

iTunes Germany 

Jamba 

Justaloud 

Labelstudio 

Last.fm 

Magix Music Shop 

Mediamarkt Musikdownloadshop 

Medionmusic 

Motorload 

mp3.de 

MP3.Saturn 


Musicbox 

Musicstar 

Musik-Gratis.net 

Napster 


o2 Music 

PlayNow 

Shop2download 

Steereo 

T-Mobile Music 

UMusic 

Vodafonelive 

Weltbild 

Zed 

zwo3.net 

GREECE 

123play 

Akazoo 

Audiotex 

Bob Mobile 

Cosmote 


Emi Downloads 

GoMP3 

iTunes Greece 

MAD 

mpGreek 

GREECE CONT. 

Newsphone Hellas 

Ringtones.GR 

Sony Music Musicstore 

Tellas 

Viva 

Vodafone 

Voiceweb 

Wind 

HONG KONG SAR, 

CHINA 

3Music 

Eolasia.com 

iMusic 

Moov 

MusicStation 

Musicxs 

O8Media 

YouTube 

HUNGARY 

Dalok 


Jamba 

Songo 

ICELAND 

Gogoyoko 

Grapewire 

Tonlist.is 

IRELAND 

3 Music 

7digital 

Bleep.com 

CD World 

Downloadmusic 

Eircom 


iLike 

iTunes Ireland 

Jamster 

Last.fm 

Meteor Music Store 

MySpace 


Universal Music 

Vodafone Music 

YouTube 

ITALY 

3italia 

7digital 

Azzurra Music 

Beatport 

Dada 

Deejay Store 

Downlovers 


GazzaMusic 

IBS 

iMusic Libero 

iTunes 

Jamba 

Last.fm 

M2O.it 

Messaggerie Digitali 

Mondadori 

MSN Music 

Net Music Media World 


Nokia Store 

Sorrisi Music Shop 

TIM 

Vodafone Live 

Yalp 

YouTube 

Zed

JAPAN 

Beatport 

clubDAM 

Dwango 

HMV Digital Japan 

iTunes Japan 

Lismo 

Listen Japan 

mora 

mora win 

mu-mo 

Music-jp 

Musico 

Musing 

Napster 

Naxos Music Library 

OnGen 

Reco-Choku 

YouTube 

LATVIA 


LITHUANIA 


LUxEMBOURG 


iTunes Luxembourg 

MALAYSIA 

Bimbit 

Gua Muzik 

Ruumz 

MALTA 


MExICO 

American Express 

Music Shop 

In2Go 

Ideas Music Store 

Mexico 

Ideas Radio Mexico 

Ideas Telcel 

iTunes Music Store 

Mexico 

Iusacell 

Iusacell Music Box 

Mixup Digital 

Movistar 



Prodigy MSN Mexico 

Tarabu 

Terra Mexico 

Tvolucion 

NETHERLANDS 

7digital 

Dance Tunes 

Downloadmusic.nl 


iTunes Netherlands 

JAHA 

Jamba 

Kindermuziek.tv 

Legaldownload 

Mega-Media 

MP3downloaden 

MSN Music Shop 


Planet Music 

PlaymeLoud 

Radio 538 

Sony Ericsson PlayNow 

Plus 

Surf2Music 

NETHERLANDS CONT. 

Toost 

YouMakeMusic 

Zazell 

ZoekMuziek 

YouTube 

NEW ZEALAND 

Amplifier 

Bandit.fm 

Digirama 

iTunes 

Jamster 

Last.fm 


Myspace Music 

Telecom Music Store 

Vodafone 

YouTube 

NORWAY 

7digital 

Bulls Press 

CDON.com Norway 

DVDHuset 

Elkjop 

Expert 

iTunes 

Jamba 

MTV 

Musikkonline 

Musikkverket & Playcom 

NetCom 

Nokia 

Platekompaniet 

Spotify 

Telenor Musikk 

TV2 

PANAMA 

Cyloop 

PARAGUAY 

Cyloop 

FeelMP3 

PERU 

Cyloop 

PHILIPPINES 

Fliptunes 

OPM Online 

Pinoy Tunes 

Star Records 

Tugtog Pinoy 

POLAND 


iplay.pl 

Jamba 

Last.fm 

Melo.pl 

mp3.pl 

Muzodajnia 

MySpace 

Nokia 

Soho.pl 

YouTube 

PORTUGAL 

7digital 

Beatport 


iTunes Portugal 

Jamba 

Nokia 

Optimus 

Qmusika 

SAPO/ Musicaonline 

PORTUGAL CONT. 

TMN 

Vodafone 

Zed 

ROMANIA 


Orange 

Vodafone 

RUSSIA 

Fidel 

Jamster 

mp3.ru 

Nextload 


Soundkey 

SINGAPORE 

Geetune 

Mobile 1 




Samsung Funclub 

Singtel AMPed 

Singtel Ideas 

Sony Ericsson PlayNow 

Plus 

Starhub Play 

Starhub Gee! 

Xpointo Media 

SLOVAKIA 


SLOVENIA 


mZone 

SPAIN 

7digital 

Beatport 

Blinko 

Deezer 


IbizaDanceClub.com 

iTunes Spain 

Jamba 

Jukebox Orange 

Last.fm 

Los40.com 

Magnatune 

Movistar Emocion 

MTV 

MySpace 



Olemovil 

PixBox 

PlayNow 

Rockola.fm 

Spotify 

Vodafone 

Yes.fm 

YouTube 

Zed 

SOUTH AFRICA 

DJs Only 

GETMO 

Jamster 

Just Music 

MTN Loaded 




Pick n Play 

Rhythm Online 

29 

SOUTH AFRICA CONT. 

Vodafone Live 

SOUTH KOREA 

3355 Music 

Bugs 

Dosirak 

Lolsong 

Melon 

MNet 

Monkey3 

MusicOn 

Musicsoda 

Muz 

Ohdio 

Soribada 

SWEDEN 

7digital 

Åhléns 

Bengans 

Blipbeat 

CDON 

eClassical 


Enjoy 

Gazell Digital Store 

Ginza 

iTunes 

Jamba 

Klicktrack 

Last FM 

Media Milkshake 




Musikshopen 

MySpace 



Poplife 

Sony Ericsson – Playnow 

Arena 

Sound Pollution 

Spotify 

Tele2 – Musikbutiken 

Telenor Musik 

Telia Musik 

Tre Music Store 

YouTube 

SWITZERLAND 

7digital 

AmazonMP3 

Ex Libris 

iTunes 

Jamba 



Napster 



Orange 

PlayNow Arena 

Soundmedia 

Sunrise Joylife 

Vidzone 

Vodafone 

Weltbild 

ZED 

TAIWAN 

Ezpeer+ 

iNDIEVOX 

iNmusic 

KKBox 

muziU 

YouTube 

THAILAND 

Cool Voice 

iMobile 

Mobifan 

Music Combo 

N-content 

Pikpod 

Ringthai 

Sab Mobile 

Sanook 

Shinee 

Tom Yum 

True Digital 

TURKEY 

Avea 

Fizy 

MPlay 

MTV 

Mynet 

Muzik.net 

Sendinle 

TTnetmusik 

Turkcell 

YouTube 

UNITED KINGDOM 

3 

7digital 

AmazonMP3 

Bleep.com 


HMV Digital 

iTunes UK 

Jamster 

Last.fm 



MySpace Music 

Napster 

Nokia Music UK 


O2 

Orange 

Play.com 

Sky Songs 

Spotify 

Tesco 

T-Mobile 

TuneTribe 

Vodafone 

We7 

YouTube 

URUGUAY 

Cyloop 

USA 

AmazonMP3 

AOL Music 

Artist Direct 

Bearshare 


iLike 

imeem 

iMesh 

iTunes 

lala 

MP3.com 

MySpace Music 

Napster 

Qtrax 

Rhapsody 

Vevo 

Yahoo! Music 

YouTube 

Zune 

VENEZUELA 

Cyloop 

This is a list of digital music services from around 

the world that appears on the Pro-music website 

(www.pro-music.org). Pro-music is endorsed by an 

alliance of organisations representing international 

record companies (majors and independents), 

publishers, performing artists, music managers 

and musicians unions. 

The list is compiled by IFPI based on information 

from its national groups at the time of publication. 

It does not purport to be exhaustive and IFPI 

cannot guarantee its 100 per cent accuracy. 

Readers should consult the www.pro-music.org 

website for the most up to date information.


Consumer Education – Lessons Learned 

Education is an essential element in addressing piracy, but can only form part of the 

solution, alongside good commercial music services and well-enforced legislation. 

The music industry has been actively 

involved in more than 70 education 

campaigns across the world over the 

last six years, ranging from consumer 

initiatives to projects for schools, parents 

and employers. An evaluation of these 

activities leads to an inescapable 

conclusion, however: education is an 

essential element in addressing piracy, 

but can only form part of the solution, 

alongside good commercial music 

services and well-enforced legislation. 

Music sector campaigns have targeted 

different audiences. The Young People, 

Music and the Internet campaign aimed 

at the “influencers” – parents and 

teachers – has been rolled out in more 

than 20 countries and 13 languages, 

in collaboration with the children’s 

welfare charity Childnet International 

and the rights holders alliance Promusic. 

The campaign has been driven 

by demand from education authorities. 

In 2008 and 2009 in the UK more 

than 135,000 information leaflets were 

requested by teachers, education 

authorities and libraries. 

IFPI has made available Digital File Check 

(DFC), an educational software tool aimed 

at offering clear and simple advice on 

how computer users can download music 

safely and legally on their computer. DFC is 

available in ten languages and distributed 

with media and retail partners. 

Campaigns have also aimed to help 

educational institutions and employers 

address copyright infringement on 

their networks. The music sector has 

published guides for colleges and 

employers which have been distributed 

in multi-language versions around the 

world. The www.pro-music.org website 

is a one-stop information source, 

established as early as 2003, providing 

essential information about legitimate 

digital music services. In France and 

Italy, consumer-targeted viral films have 

brought home the unsung community of 

workers involved in bringing an album 

to the market. High-profile litigation 

has also had a key role in the music 

industry’s awareness-raising activities 

in recent years. 

“ Whilst more education 

is needed, increasingly 

familiarity with the law does 

not appear likely, on it’s own, 

to reduce file-sharing.” 

Harris Research 

Since 2003, the industry has taken 

more than 100,000 civil and criminal 

legal actions against individual illegal 

high volume file-sharers in 22 countries. 

Surveys have showed both in the US 

and Europe that these waves of wellpublicised 

legal actions had a very 

significant impact in raising awareness 

of the law on unauthorised file-sharing. 

Research by GfK in Europe showed 

that after legal actions awareness of 

illegality levels reached 70 per cent. 

In the US, research by Public Opinion 

Strategies in 2003 and 2004 showed 

awareness levels jumped from 35 to 

74 per cent after the commencement 

of lawsuits. Harris Interactive research 

30 

found in 2009 that 78 per cent of the 

UK population aged 16-54 understands 

file-sharing copyrighted music is illegal. 

Despite all the educational work 

undertaken in recent years, the 

evidence is strong that awarenessraising 

alone is inadequate in shaping 

consumer behaviour in the digital 

music market. The “carrot” of good 

legal services has a vital role to play. 

So too does an element of sanction. 

Research has shown that awareness 

of the law alone has not succeeded in 

changing behaviour in a sustainable 

way. Without a perception of risk, 

comparable to speeding fines or other 

forms of social deterrent, consumer 

behaviour remains largely unchanged. 

This was revealed in the European 

Union’s 2007 Safer Internet for Children 

report, covering 29 countries. The study 

highlights that “in the vast majority of 

cases, across all countries, children 

know that most of the downloads are 

illegal, but they minimise, deny or justify 

the practice. Everyone does it.” 

The finding was reinforced in research 

conducted by Harris Research in the 

UK in 2009. The survey found that 

music file-sharing among those “very 

familiar with the law” (33%) was far 

more common than among the general 

population (23%). Harris concluded: 

“Whilst it is undoubtedly the case that 

more education is needed to persuade 

file-sharers to cease sharing copyrighted 

music, increasingly, familiarity with the 

law does not appear likely, on its own, 

to reduce file-sharing.” n

Page 10-11 photo credits: 

Lady Gaga – Oliver Rauh 

Black Eyed Peas – Meeno 

Taylor Swift – James Medina 

© IFPI 2010. 

All rights reserved. No part of this publication may be reproduced, 

distributed or made available without the permission of the copyright owner. 

Designed by Band London www.bandlondon.co.uk 

Original illustrations by Amy DeVoogd www.devoogd.com

www.ifpi.org

IFPI Digital Music Report 2010

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