Action to stop digital music piracy is gaining momentum worldwide, with implementation by ISPs of warnings and deterrent sanctions taking effect in three countries in 2010 and governments in other countries expected to implement measures in 2011, according to a new report by the IFPI (International Federation of the Phonographic Industry). The group represents the recording industry worldwide with some 1,400 members in 66 countries and affiliated industry associations in 45 countries.

ISP cooperation measures are now in place aimed at substantially reducing illegal file-sharing in France, South Korea and Ireland. Governments in several other countries, including the UK, New Zealand and Malaysia, are expected to implement new laws in 2011 and the European Union is reviewing its intellectual property enforcement legislation, says the IFPI.

An overview of the global digital music sector is provided in IFPI’s “Digital Music Report 2011” The report shows that consumer choice for accessing music via digital channels continued to grow in 2010. New subscription models, such as Spotify, Deezer and Vodafone, expanded to complement the hundreds of download services already available to fans. Record companies have also partnered with ISPs and mobile operators to offer music services in Ireland, Taiwan, Italy, South Korea, Denmark, Norway and Sweden.

Digital music revenues grew by an estimated 6% globally in 2010 to US$4.6 billion, accounting for 29% of record companies’ trade revenues in 2010. The IFPI says industry action is helping develop this legitimate business. Limewire, the biggest source of infringing downloads in the US, has been declared illegal and Mininova, a major BitTorrent site, shut down its illegal activities. The Pirate Bay was blocked by a court in Italy and its operators’ criminal convictions were upheld by the Court of Appeal in Sweden.

Despite these developments, however, digital piracy continues to massively erode industry revenues, hitting jobs, investment in new music and consumer choice. The IFPI report comprehensively reviews the scale and impact of the problem. Notably:

° Fewer new artists are breaking through globally. Total sales by debut artists in the global top 50 album chart in 2010 were just one quarter of the level they achieved in 2003.

° Traditionally vibrant music local industries, such as Spain and Mexico, are especially hard hit. In Spain, where music sales fell by an estimated 22 per cent in 2010, no new home-grown artist featured in the country’s top 50 album chart, compared with 10 in 2003.

° Jobs are at risk across the creative industries. Independent research in 2010 from Tera Consultants, backed by trade unions, found that 1.2 million jobs could be lost across the creative industries in Europe alone by 2015 if no action is taken to tackle piracy.

“As we enter 2011, digital piracy, and the lack of adequate legal tools to fight it, remains the biggest threat to the future of creative industries,” says Frances Moore, chief executive of IFPI. “Great new legitimate music offerings exist all over the world, offering consumers a wide range of ways to access music. Yet they operate in a market that is rigged by piracy, and they will not survive if action is not taken to address this fundamental problem. This is the challenge and the opportunity for governments to seize in 2011.