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Analysis Australian lawyer, academic researcher and music industry commentator Alex Malik presents the first of a two part look at the Australian market for digital downloads. His research has found that while IFPI are spinning the success of authorised downloads, the reality shows that at least in Australia, there are substantial gaps in available repertoire and a heavily protected market controlled by the majors. He can be contacted at Alex.Malik@student.uts.edu.au.

If you examine the behaviour of the international recording industry in relation to so-called internet piracy, you can classify its behaviour in one of three ways:

1. A campaign of civil proceedings (and where possible criminal proceedings) against individuals and companies they claim are involved in unauthorised downloading,

Here are some examples of record industry proceedings against: • P2P services like Grokster (in the US), Kazaa (in Canada, the US, the Netherlands, and Australia), and other services, • ISPs like Comcen and Swiftel (in Oz) and against international ISPs which dare to refuse to divulge the personal details of their clients, and • Individuals (in the US, Canada, the UK and other jurisidctions).

2. An education campaign aimed at discouraging individuals from downloading sound recordings from websites and services that they have not licensed.

Examples include:

  • Press releases and other PR activities,
  • The publication of content on IFPI and IFPI-affiliated websites
  • Television, radio and newspaper advertisements featuring recording artists decrying "illegal downloading"
  • Subtle messages in Awards shows!

3. A campaign designed to encourage music consumers to source their digital music files only from so-called authorised sites.

IFPI, the body that represents the worldwide recording industry recently proclaimed that “the legitimate digital music industry is expanding fast globally (and) single track downloads in the top four online markets in 2005 have more than tripled in the last year.” Strangely enough ,this press release also found its way onto some of its member websites. (For example – the Canadian version is here.)

It is apparent that IFPI view legitimate sites as websites where consumers can purchase licensed digital downloads of sound recordings, with a share of the revenue going to record companies. IFPI reports more than 300 legitimate websites around the world offe digital downloads to consumers. IFPI even publishes a list of approved sites on its por-music website – does this mean any site not on this list is a pirate site? (... another question for another time!)

So the legitimate digital music industry is booming. Excellent! Let us investigate this claim from an Australian perspective.

Australia is one of the world’s top 10 markets for recorded music by size, and is the source of international recording artists such as Kylie Minogue, Natalie Imbruglia, Catherine Britt, Ben Lee, Keith Urban, Jet, the Vines and Delta Goodrem. Yet in Australia, there are only three companies that offer downloads to consumers – HMV/Ninemsn, Telstra’s Bigpond Music and Destra (through a series of other companies such as Sanity).

Why are there only three major Australian services, when there are so many more international services? There is no definitive answer to this question, but it appears that Australian record companies have simply refused to support other services. Australian record companies appear to cling stubbornly to traditional business models. They accept that they can make more money by having consumers purchase physical CDs, rather than digital downloads. They hope that consumers will return to the CD purchasing habit … but why would they when digital downloads have proven to be so easy and popular for young Australians?

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Next page: Out of iTunes

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