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Legal downloads jumped 900% in 2004

Fledgling market has a long way to go, though

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More than 200m songs were downloaded from legal online music stores around the world last year - a 900 per cent increase over 2003's total, the music industry organisation IFPI said today.

By our estimation, based on Apple's publicly provided figures, Apple accounted for 90-95 per cent of the market.

Welcoming the brave new world of digital downloads and DRM restrictions, IFPI released its Digital Music Report 2005 today. Its conclusion: digital music is proliferating, but plenty more needs to be done to raise awareness of legal download services and to stamp on unauthorised ones.

According to the IFPI, 2004 was a watershed in online sales. By the end of the year, some 230 legal download services were operating in 30 countries, compared to around 50 at the end of 2003.

The recording companies saw their first significant revenues from the digital market, "running into several hundred million dollars". IFPI cited market watcher Jupiter's estimation of the value of the digital music market in 2004: $330m. If the recording companies are getting more than "several hundred million dollars" of this, it leaves little to share among 230 legal download companies.

Still, Jupiter estimates 2005's total will be more than double 2004's, as more punters choose to buy downloads rather than CDs or pinch stuff from the likes of Kazaa and Grokster. Is there really a move away from free downloads? It's hard to say, but a survey conducted in the six biggest European music markets on IFPI's behalf, show that 31 per cent of music downloaders claim they will buy from legal services in 2005, up from almost one in five (22 per cent) this time last year.

Campaigns to help promote legal downloads help, but more needs to be done, to raise awareness of the availability of legal services among the key 16-29 age group, among whom only half have even heard of legal download sites, IFPI claims.

We argue that more needs to be done to balance the price of downloads with the restrictions and audio quality limitations imposed upon the tracks by the music industry, particularly given the trend toward ever cheaper CDs.

Positive reinforcement

Making punters care will even harder. IFPI reckons 70 per cent of music downloaders are aware that it's illegal to download from unauthorised sites, but there's little sign that downloading this way has lessened. There may be fewer songs being shared, in part thanks to the Recording Industry Ass. of America's high-profile legal campaign, as well as more restrained moves made by the RIAA's European counterparts; but anecdotal evidence suggests 'illegal' downloading is taking place more than ever.

Anecdotal evidence also suggests that active downloarders are downloading tracks they wouldn't otherwise have purchased, and also tend to be high-volume music buyers. Still, plenty use it as a way of avoiding handing the pigopolists and artists their due, so the illegal download arena isn't entirely a picture of a misunderstood and victimised majority.

"The biggest challenge for the digital music business has always been to make music easier to buy than to steal," says John Kennedy, IFPI's chairman and CEO. True - so take note, IFPI members and start licensing greater volumes of content, on better terms. And work to eliminate some of the more unnecessarily restrictive DRM limitations you place on your songs. Remember, a happy customer will be a customer again.

You know you can do it. ®

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2004 in review: downloading digital music

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