- Associated Press - Monday, January 23, 2012

LONDON — Legitimate music downloads aren’t growing quickly enough. A report published Monday by the recording industry’s main lobby group shows that digital revenue has grown 8 percent over the past year, to about $5.2 billion - a solid figure for some industries, but not one in which overall receipts have fallen by nearly two-thirds amid a shift toward online - and, in many cases, illegal - music downloads.

“The 8 percent figure should be much higher,” said Frances Moore, chief executive of the International Federation of the Phonographic Industry. “That’s part of our task in 2012.”

Ms. Moore blamed music piracy for starving online retailers and music subscription services of customers, saying the legitimate music business is working in an “extremely challenging” environment.

“It’s very difficult to turn things around overnight,” she said.

The IFPI’s report highlights many of those turnaround efforts, noting, for example, that there are about 500 legitimate music services worldwide offering up to 20 million tracks.

It says subscription services are doing particularly well in Scandinavia, the home of the popular music service Spotify, whereas in France, the number of subscribers nearly doubled in the first 11 months of 2011.

Music pirates remain the IFPI’s No. 1 enemy, and the group’s report congratulates several countries on their efforts to crack down on illegal file sharing.

It says French authorities sent out more than 700,000 warnings to suspected copyright violators, an act it says helped drive down file sharing on peer-to-peer networks by 26 percent since October 2010.

In the United States, the group said most major American Internet service providers had signed up to a “copyright alert system” aimed at issuing similar warnings to suspected file sharers.

Even in China, where piracy rates approached 100 percent, the IFPI said progress was being made. In June, record companies joined hands with the search engine Baidu to fight pirated content and create the authorized digital music service Ting.

But the fight against infringement has seen some high-profile reverses, including last week’s shelving of the Stop Online Piracy Act in the U.S., which was intended to block access to pirate websites. Critics accused the law’s backers of installing a regime of Internet censorship, and Google and Wikipedia partially obscured or entirely blacked out their websites in a dramatic and ultimately successful protest.

Ms. Moore described the bill’s demise as a setback and said the technology community “has come out a bit hysterically against this.”

She said her organization would continue to lobby internationally for website blocking, arguing that the measure was “efficient, effective and proportionate.”

There’s much at stake as the music industry struggles to build its online presence. Worldwide sales of physical music - such as CDs - have dropped from $28.1 billion in 2000 to $10 billion in 2011.

Independent media analyst Mark Mulligan said the music industry in the U.S. has “already lost half of the music market in the past 10 years.”

He said there was no realistic hope digital music would make up for the shortfall in the near term.

“What we’re talking about is: ‘How much of a burning building can we save from the flames?’ ” he said.

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