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By: MarkJ - 28 April, 2010 (11:39 AM)
uk music piracyThe British Phonographic Industry (BPI), a trade body representing the UK music industry, has reported a 1.4% annual increase in total trade income for 2009 of £928.8m (excludes live shows and performance royalties). Revenues from digital services in 2009, such as broadband internet streaming and legal music download sites, grew by a staggering 47.8% to hit £188.9m (£127.8m in 2008).

Digital revenue now accounts for 98% of track units sold and about a fifth (20.3%) of the overall annual income. In the online sector alone, total income from downloads of digital tracks (£83.7m), albums (£67.3m) and video sales (£3m) increased by 51.7% to £154m overall in 2009.

Sadly trade income from physical formats declined 6.1% during 2009, with total revenues down from £787.8m to £739.9m continuing the downward trend for the sixth year in a row. As usual, and despite the digital growth, the BPI appears keen to blame any reduction on only one reason - unlawful downloading by customers of broadband ISPs.

Geoff Taylor, BPI Chief Executive, said:

"It’s encouraging to see industry revenues stabilise and even show modest growth in 2009. This is testament to continuing investment by UK labels in talented artists despite challenging economic conditions, and the innovation labels have shown in licensing new digital services.

But let’s put it in broader perspective: 2009’s modest result follows a five-year drop in annual income, and total industry income has not exceeded £1bn since 2006. The CD continues to show greater resilience than many predicted – it is an excellent digital product.

The pace of growth of new digital services is encouraging, but the size of the market continues to be constrained by competition from illegal downloads."

The music industry has in the recent past appeared to base its economic assessments on the principal that one unlawful download should be equal to one lost sale. This suggests that somebody who downloads 500 songs would have actually brought that many in the first place, which isn't realistic, especially among younger people where piracy is most common (pocket money doesn't get you much).

Elsewhere streaming ad-supported services, such as Spotify, we7, Last.fm and YouTube, grew their contribution to industry income by 247% to £8.2m. This was the largest increase of any sector, though it represents less than 1% of the annual total. Income from subscription download services, such as eMusic, Napster, BT Vision as well as income from Spotify Premium, also recorded healthy growth of 37.2% in 2009 to reach £11.8m.
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