Page last updated at 13:16 GMT, Thursday, 21 January 2010

Online music piracy 'destroys local music'

Lady Gaga
Lady Gaga topped the digital download chart of 2009.

Countries like Spain run the risk of becoming "cultural deserts" because of online file-sharing, the music industry has claimed.

The International Federation of the Phonographic Industry (IFPI) says that global government legislation is essential to the sector's survival.

It cited Spain as an example of a country which does not have laws in place to prevent illegal downloads.

The sales of albums by local artists there have fallen by 65% in five years.

Federation chairman John Kennedy said the situation in Spain is now "almost irreversible".

"Spain runs the risk of turning into a cultural desert," commented Rob Wells, Senior Vice President, Digital, at Universal Music Group.

Drastic action needs to be taken in order to save the Spanish music industry
Rob Wells, Universal Music Group

"Drastic action needs to be taken in order to save the Spanish music industry."

In a market that is "rigged by piracy" it is non-English language music which suffers the most when the music industry tightens its belt added Mr Kennedy.

This is because global stars such as Lady Gaga, who topped the digital download chart of 2009 with 9.8m downloads for her single Poker Face, are regarded as more secure investments.

Legislation required

In the UK the IFPI said it was supportive of the proposed Digital Economy Bill, which includes legislation to cut off persistent illegal file sharers.

"If there is a risk of kids losing their internet connection, they will stop," said Mr Kennedy.

One word kept cropping up in the conversation as a beacon of hope for the music industry - Spotify
Rory Cellan-Jones
BBC technology correspondent

He described the loss of the recent court case against BitTorrent website Oink as "a terrible disappointment" and an indication that current laws in the UK are "out of touch with where life is".

He expressed support for the bill's controversial clause 17, which would give the Secretary of State power to make changes to copyright laws.

"I hope they won't throw clause 17 overboard," he said. "We want this to be futureproof."

However, companies such as Google and Facebook believe that the ability to make fundamental changes are too broad and could stifle innovation.

"IFPI is calling for a copyright ratchet that will remove due process and threaten our human rights," said Jim Killock, Executive Director of the Open Rights Group.

"Copyright holders cannot hope to micro-manage the behaviour of every consumer."

Despite the stranglehold the industry considers itself to be in, legitimate music services are starting to pay off, the IFPI believes.

Global digital revenues increased by 12% in 2009. In the US, iTunes is selling more music than Walmart and digital sales account for 40% of the industry's revenue.

"The news from the commercial viewpoint is reasonably good but it's not happening fast enough," said Mr Wells.

He highlighted Spotify as the most successful financial model and said that the Orange monkey service, a joint venture between Universal Music Group, 4Music and Orange, had acquired 110,000 subscribers since its launch in July 2009.

The pay-as-you-go service offers free access to music in exchange for a regular top-up of at least £10 a month.

"The music industry finally believes it is making progress in the battle against web piracy with governments taking action and legal music services beginning to prove viable," said BBC technology correspondent Rory Cellan-Jones.

"But the industry is still furious about what it sees as negligence by some governments notably Spain - and is warning that there is a growing threat to local artists posed by piracy."

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