Impact Of Internet Music File Sharing &
Internet file-sharing and
CD burning have now been confirmed as having a negative impact on
the Australian sales of recorded music, according to a ground-breaking
study released today by the Australian Record Industry Association
While the industry acknowledges
that other legitimate forms of competition (such as DVDs and computer
games) are having an impact, the Quantum Market Research study confirms
anecdotal evidence of a sharp rise in illegal copying and distribution
of music and its impact on the purchasing behaviour of consumers.
File sharing and CD burning
results in a loss to the artist who performed the music, the songwriter
who originally penned the work, the music company which invested both
time and money in bringing the product to market and, of course, the
"Ultimately the consumer
is the loser. With copying rampant there is diminishing motive to
invest in music production or risk supporting new talent. File-sharing
and CD burning contributes to the slow but steady weakening of the
local and international music industry," said ARIA Chief Executive,
Quantum Market Research
focussed on these two common practices. It found:
- Around 3.6 million Australians illegally burnt a music CD in the
6 month period prior to the research.
- Around 3.4 million Australians illegally downloaded music files
via file sharing services (1.8 million of these have used file sharing
services in the one month period prior to the research).
- File-sharing and CD burning is sharply higher in the age groups
- CD burning: 22% over last six months (general population) vs.
40% (under 25's)
- File sharing: 11% in last month (general population) vs. 26%
- Illegitimate channels account for 10.7% of all music acquired
by the general population:
- 31% of all music acquired by those 17 and under; 21% for 18-24's
- 40% of the general population have at some stage received a burnt
CD (69% in the 18-24 age group).
- Specifically in relation to file sharing:
- Among file sharers, the average volume downloaded in the last
month was 19.6 files (32.4 files in the 18-24 age group)
- 21% are using a broadband connection (ie. significantly over-represented
relative to the general population)
- Over 50% of file sharers then burn their music files to CD or
transfer to MP3 player
More than 80 % of people
who received burnt CDs say that they would 'rarely' or 'never' buy
a copy of a burnt CD they had received. More than 50 % of file sharers
tend not to buy music they have downloaded (ie. 'rarely' or 'never'
Among file sharers, there
is a net decrease of 12% in CD purchasing which they identify as being
as a direct result of file sharing.
In terms of consumer awareness,
two- thirds of the sample group were aware that CD burning/file sharing
is illegal, but only 49% of those aged 10-24.
The study showed that 57%
of the general population agree that "burning music without paying
for it is like stealing" (only 35% of under 25s) while 49% agreed
that "downloading music from the internet without permission is like
stealing a CD from a record store" (only 33% of under 25s).
"The study confirms that
people are increasingly comfortable with accessing music in an online
environment. The challenge for the music industry is that a significant
amount of music is being accessed through illegitimate channels,"
said Stephen Peach.
"Levels of CD burning and
Internet file sharing are significant in Australia , and having a
real impact on sales of legitimate music. The Australian data is consistent
with overseas information. However, the very substantial sales decreases
being reported in key North American and European markets over recent
times provide an indication of how much worse this problem, and its
consequences, can become", concluded Mr Peach.
The music industry recognises
that its top priority is to reverse the identified trend and to continue
to respond positively to the online environment.
While this is an evolving
process, key initiatives being pursued internationally and in Australia
- Support and development of legitimate online business models that
represent an appealing alternative to consumers (e.g. Apple iTunes).
- Education of consumers (particularly young consumers) about the
risks, wrongs and consequences of file sharing and CD burning. It
is encouraging to note that amongst those members of the community
over 25, the acquisition of music through illegal channels is not
very common and that there is also a much higher awareness of the
fact that such behaviour is illegal.
- Technological strategies and solutions, such as CD copy control
- Litigation and effective legislation and enforcement activities.
To see the research findings
16 July 2003