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Internet Piracy Concerns Fail to Impede Significant UK Digital Music Sales Growth

Posted: 16th Feb, 2012 By: MarkJ
uk music piracyThe British Phonographic Industry (BPI), a trade body that represents the UK music industry, has today reported that trade income from digital music increased by a quarter (24.7%) to £281.6m during 2011. As a result, total digital music income (e.g. from internet downloads) now accounts for more than a third (35.4%) of the country's recorded music turnover (up from 27.4% in 2010).

As usual most of the growth appears to have been cannibalised from a sharp -14.1% decline in trade income from physical music (e.g. albums CD's), which fell to a total of £513.8m in 2011 but still manages to account for nearly two thirds of the entire market.

Last month the BPI warned of falling investment and lost jobs (here) because the Government was allegedly "taking too long to act" against "chronic piracy" from broadband ISP customers. Curiously today's report makes no mention of internet copyright infringement (unusual for the BPI).

Geoff Taylor, BPI Chief Executive, said:

"It is highly encouraging for the long-term prospects of the industry that the pace of digital growth continues to accelerate. British labels are supporting a wide range of innovative music services and music fans are embracing digital like never before.

The record industry has continued to invest heavily in discovering and supporting outstanding British talent, which has helped sustain revenues in the face of difficult economic circumstances."

The income from subscription digital music services (Spotify Premium, Napster, We7 and eMusic) also grew by 47.5% during 2011 to reach £24.0m. By comparison the ad-supported free digital services (Spotify, YouTube, We7 and last.fm) earned £10.7m, which dipped by 1.4% year-on-year.

It's known that digital sales tend not to bring in the same level of revenue as physical media, not least because consumers finally have the freedom to pick and choose what tracks they like from a digital album and thus ignore the rubbish. However, piracy usually still takes the blame, which also ignores the impact of any wider economic problems.

uk recorded digital music income 2011

Meanwhile the ever controversial Digital Economy Act (DEA), which aims to warn and ultimately punish (e.g. disconnect) ISP customers who become "suspected" of involvement with internet copyright infringement activity (piracy), continues to be stalled by a legal challenge from TalkTalk and BT Retail (the appeal began in January 2012). Not to mention other technical problems, political disagreements and legal tests.

At the same time ISPs, Rights Holders and the government are due to propose alternative plans for website blocking (censorship) of the most prolific piracy sites, which would be a voluntary system. Many expect this to be revealed as part of the new Communications Bill before the end of this month (here).
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