Greater government crackdowns on online piracy are needed to protect the music industry, which has lost $9billion in revenue since the start of the 21st century.
But the music industry needs to find new ways to engage a significant part of the population which has been switched off by the digital music revolution.
These are the key messages from a major study of music piracy around the world by academics at Bristol’s University of the West of England (UWE).
Their research estimates that 28% of digital music worldwide is shared illegally through file-sharing, showing one of the reasons why the likes of high street chain HMV have faced such difficulties.
Results from 10 countries showed the level of illegal downloads ranged from 14% in Germany to 44% in Spain.
Revenue from the total music industry has been shrinking since the start of the century, falling from US$22bn in 2000 to US$13bn in 2010.
The team at UWE says governments need to continue efforts to prevent illegal file sharing, but also called on the industry to re-engage with lost customers who had been turned off by digital downloads.
“Our results support the need for policy makers to introduce stronger legislation to protect this industry. However preventing piracy through legislation is not the only response open to the music industry,” said Professor Glenn Parry from the Bristol Business School at UWE.
“We found that the fall in revenue is also partially due to a reduction in consumption. We identified a large percentage of people who enjoy music but have not been engaged by the digital music market. They represent an important segment of people who may come back to the market through innovative new approaches to music provision.
“New business models are being developed but the ideal recipe for a successful music business model has yet to be found. The solution may be music as a service rather than the traditional physical CD. There is a need to look more closely at customers’ behaviour and to develop businesses which seamlessly meet their needs and get them passionate, engaged and buying music again.”