The illegal downloading of software.
The music industry is still losing out to internet pirates on a huge scale, with an estimated 95% of music available online being downloaded illegally.
Research carried out in 16 countries by the record industry body found that an estimated 40bn files were illegally shared in 2008. The report took responses from a number of consumer surveys over the last three years about downloading habits and compared them with the 2.3bn legitimate online tracks that were sold in 2008. It concluded that piracy rate last year was as high as 95%.
In the UK market alone, the record industry lost £180m last year, and will lose more than £1bn by 2012 if nothing is done, the report found.
The UK saw the biggest increase in digital sales in the first half of 2008 among the top markets around the world, with sales up by 45%. A total of 110m single tracks were downloaded in 2008, up 42% on the year before. Digital album sales also rose sharply, by 65% to 10.3m, and now account for 7.7% of the albums market.
The report, published yesterday, also found that consumer demand for music is higher than ever, despite the dramatic decline in CDs sales last year. The question remains how the industry best deals with that demand and turns it into profit.
The IFPI also said that paid-for single track down loads, up 24% globally in 2008, now drive the online market, with sales exceeding 1.4bn. The biggest-selling single of last year was Lollipop by US rapper Lil' Wayne, with 9.1m downloads globally, 1.8m more than the biggest seller of 2007. Overall, it is estimated that digital music sales are worth £2.5bn. Digital sales now account for around 20% of recorded music sales, up from 15% in 2007.