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Monday, October 6, 2003		 Feature

Internet music sales to hit industry hard
Prasun Sonwalkar

THE value of lost sales to the music industry from file-sharing Internet networks will nearly double in the next five years, says a new market report in London. The loss from networks such as Grokster and Kazaa will nearly double over the next five years to $4.7 billion.

The study by Informa Media said revenues from retail sites such as Amazon.com and legitimate download services such as Apple’s iTunes will rise from $1.1 billion in 2002 to reach $3.9 billion in 2008.

But Internet piracy will continue to blight the music industry that saw global sales fall by 7.2 per cent last year, the report warns.

It predicts that so-called peer-to-peer networks, which allow fans to swap files containing songs over the Internet, will evade the legal clutches of the record industry.

The value of lost sales will rise from $2.4 billion in 2003 to $4.7 billion in 2008, despite the launch of legal services by big record groups and the threat of lawsuits against people who download music illegally, the Guardian has reported. According to Informa, CD sales will account for $2 billion of the predicted $3.9 billion in legal online music sales in 2008, with download and subscription services accounting for the remainder.

Simon Dyson, author of the report, said file-sharing sites were now adapting to the crackdown on piracy by giving more anonymity to users.

"We believe that peer-to-peer file sharing will still be going on in 2008.

The likes of Grokster are changing their emphasis from ease of use to providing anonymity, making it difficult to see who you are, where you are and what you are sharing," he said.

The focus on anonymity comes amid a controversial crackdown on Internet pirates in the US.

This month the Recording Industry Association of America (RIAA) filed 250 lawsuits against consumers for allegedly breaking copyright laws by downloading music illegally.

The move was criticised after it emerged that the RIAA had served a writ on 12-year-old schoolgirl Brianna LaHara; her mother settled the case with a $2,000 payment. — IANS

Israeli gets tough
Gwen Ackerman

ISRAEL'S music industry has vowed to crack down on local online song swapping and said it would show zero tolerance. "We have decided to do anything in our capability to protect the assets of the industry," said Ronnie Braun, head of Israel’s branch of the International Federation of the Phonographic Industry (IFPI), the global music industry’s trade body.

The action is part of efforts to stamp out the copying of music over the Internet, which the music industry blames for a decline in sales of recorded music in the past two years.

Israel’s decision to pursue legal action follows the example set by the Recording Industry Association of America (RIAA), which is cracking down on "peer-to-peer users" suspected of widespread copyright violations.

"Israel is a modern hell for anything that has to deal with Internet and copyright," said Braun, who is also the owner and managing director of Tel Aviv-based Helicon Records.

He said that, acting on RIAA instructions, he had collected names of Israeli users of the file-swapping networks and intends to seek out Internet service providers (ISPs) that sell broadband services by promoting file-sharing.

"On the one hand, you have people who think they deserve to get things for free and have a philosophy of not being a sucker, and on the other hand this is a haven for early adapters to technology, so the combination makes it a real nightmare," he said.

The RIAA has filed a copyright infringement lawsuit in New York against the Tel Aviv-based file-sharing network iMesh, which is registered in the US state of Delaware.

KaZaa, Morpheus and iMesh let Internet users trade software, music and video over the Internet.

iMesh denied infringing copyright and said the lawsuit was "ill informed".

The recording industry’s long-term goal is to move users of file-swapping services to industry-sanctioned services, which charge users a fee for downloading music. Reuters