According to the group, 2004 saw an "amazing change in the digital music landscape". Record companies saw their revenues from digital music grow from zero to several hundred million dollars; the number of online services where consumers could buy music rose four-fold to 230-plus worldwide and the number of downloaded tracks in the United States, United Kingdom and Germany combined rose more than 10-fold to more than 200 million.
In addition, the record companies have digitised and licensed more than one million songs, doubling the available catalogue on major services from the previous year.
The International Federation of the Phonographic Industry -- which claims to represent more than 1,450 record companes worldwide -- claimed the industry had finally started to meet and deal with its biggest challenge: making music easier to buy than to steal.
After a sluggish start, the music business is moving quickly to exploit the opportunities posed by so-called "legitimate" peer-to-peer services and the consumption of music on mobile phones.
That exploitation is, however, being coupled with a ruthless global legal assault on all parties involved in what the music industry claims is widespread online music piracy. IFPI says that assault -- which has spawned more than 7,000 legal actions in North America and Europe alone -- will see "a lot more cases in more countries in 2005". Despite some success, it has a way to go. IFPI claims there are 870 million unauthorised music files on the Internet in January 2005, down only slightly from 900 million in January 2004.
Now your correspondent likes nothing better than to see an industry embrace the potential of new technologies and the opportunities for revenue growth that they open up. It is also very hard to argue that people should be able to gain unauthorised access to music files without compensation being paid to the right-holders and creators of the work.
However, the tactics employed by the industry, while in pursuit of a legitimate end, leave a sour taste in the mouth. The high-powered legal blitz employed against music enthusiasts in many countries -- in many cases, a generation that has swapped music with relative impunity for many years -- is only likely to further alienate a user base that already views record companies with acute distaste. In Australia, where the focus is more on dragging the alleged facilitators of piracy -- rather than individuals who have illicitly copied files -- into court, the peak music industry body has not escaped unscathed. Many commentators criticised the body for claiming peer-to-peer piracy was damaging sales when, in 2003, they actually hit a record high. In short, the music industry does seem to be making headway in crippling unauthorised music file-sharing. But it isn't winning many friends in the way it is doing so.
What do you think of the music industry's tactics? E-mail us at edit@zdnet.com.au and let us know.
Digital music has always been an opportunity - the music industry has just preferred to ignore it because it is a threat at the same time. While piracy is one risk of releasing digital downloads it is not what really threatens the music industry - let's face it piracy seems to have always been around and done pretty well without legal download sites. If you examine the cost components of a CD payment to artists and the record company are typically only a small part - the largest costs are retailer mark up and manufacturing/distribution. Removal of the retail channel limits the ability of the music companies to push their product - they would be at the whim of what the public actually wanted to buy. Elimination of the manufacturing & distribution costs cause problems because guess who owns the manufacturing & distribution companies... Eliminating the middlemen (and ****ociated costs) actually decreases the record companies' income. Much better to blame the pirates that to admit they are lining their pockets at consumers expense.
I earn a very good salary and I am quite happy to pay for music that I want - however through the introduction of "copy protection" technologies and music stores that are not compatible with the iPod I have been forced to turn to illegal downloads of music which I would have purchased. I don't think that the music industry has won a battle - they are simply facing up to a reality that has been staring them in the face since the first MP3 file was placed on the Internet.