While industry revenues from digital formats continue to grow, and in 2012 surpassed $4 billion for the first time ever, up 14.0% versus the prior year after crossing the 50% threshold for the first time in 2011, digital music theft has been a major factor behind the overall global market decline. And although use of peer-to-peer sites has flattened during recent years, other forms of digital theft are emerging, most notably digital storage lockers used to distribute copyrighted music.
Consider these staggering statistics:
- Since peer-to-peer (p2p) file-sharing site Napster emerged in 1999, music sales in the U.S. have dropped 53 percent, from $14.6 billion to $7.0 billion in 2011.
- From 2004 through 2009 alone, approximately 30 billion songs were illegally downloaded on file-sharing networks.
- NPD reports that only 37 percent of music acquired by U.S. consumers in 2009 was paid for.
- According to the Information Technology & Innovation Foundation, the digital theft of music, movies and copyrighted content takes up huge amounts of Internet bandwidth – 24 percent globally, and 17.5 percent in the U.S.
- Digital storage locker downloads constitute 7 percent of all Internet traffic, while 91 percent of the links found on them were for copyrighted material, and 10 percent of those links were to music specifically, according to a 2011 Envisional study.
The music industry, while enormous in its economic, cultural and personal impact, is by business standards relatively small. So theft on this scale has a noticeable and devastating impact: employment at the major U.S. music companies has declined by thousands of workers, and artist rosters have been significantly cut back. The successful partnership between a music label and a global superstar – and the revenue generated – finances the investment in discovering, developing and promoting the next new artist. Without that revolving door of investment and revenue, the ability to bring the next generation of artists to the marketplace is diminished – as is the incentive for the aspiring artist to make music a full time professional career.