IFPI Reports: ISP piracy warning notes work

The Feedster

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Jun 26, 2007
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Sales of CDs are at their lowest for ten years, with the increase in sales of music online failing to make up the considerable loss in revenue to the music industry, which continues to feel the pinch of illegal P2P downloading.

A new report from the International Federation of the Phonographic Industry claims that global music sales dropped 8 percent to $19.4 billion in 2007 - the slowest pace since 1997, with sales of CDs and DVDs down 13 percent to $15.9 billion and a concomitant growth in the revenue from downloaded songs and mobile ringtones up 34 percent to $2.9billion.

Free music undermines

John Kennedy, chairman and chief executive of the IFPI says that online and mobile sales "are growing healthily but, crucially, not fast enough to arrest the overall decline of the market," adding that, "even the most innovative business models are totally undermined by free music."

The report claims that physical and digital piracy cost the U.S. music industry alone $5.3 billion in 2007, with online P2P downloading making up the lion's share of the problem for the music industry.

Warning notes work

Interestingly, following recent initiatives from the BPI and Virgin Media in the UK, the IFPI report claims that over two-thirds of file-sharers would stop if they received a warning note from theirinternet service provider.

Expect further updates on the Virgin/BPI 'warning letter' initiative on TechRadar in the very near future.