According to a report from the IFPI – the organisation representing the international recording industry – the music industry's Internet strategy is "turning the corner".
The report indicates an increase in the amount of music available to download, an increase in the number of legal downloaders – currently half a million in Europe – and an awareness that unauthorised file-swapping is illegal.
IFPI chairman and CEO Jay Berman described a "new sense of optimism and evidence of real change" in the industry. He predicted: "In 2004 there will be, for the first time, a substantial migration of consumers from unauthorised free services to the legitimate alternatives that our industry is providing internationally."
The IFPI Online Music Report 2004 is the recording industry's first comprehensive global progress report on the growth of legitimate online music business. It states: "New legal online music sites are spreading fast and the campaign against illegal music file-swapping is making a clear impact across the world."
It also indicates that legal online music is taking off internationally thanks to the success of services such as Apple iTunes Music Store, Napster and Rapsody – and states that announcements of services outside the USA are expected by those players in the first half of 2004.
According to the report, half a million Europeans are already signed up to more than 30 different legal sites. The IFPR predicts that this figure will rise sharply in 2004.
But the report highlights that despite the increasing number of legitimate online services now in Europe, consumer awareness of them is very low. According to the report, only one in four consumers surveyed are aware they can get music legally online.
And yet people are aware of the industry's Internet anti-piracy campaign. According to the report, most people in Europe know that file-swapping is illegal.
According to an IFPI survey, 66 per cent of people in Denmark, France, Germany and the UK know that file-swapping without permission of the copyright holder is illegal. Of the consumers surveyed, 54 per cent support legal action being taken against infringers.
The IFPI concludes that: "These very high levels of awareness are put down to the massive escalation of the industry's internet anti-piracy efforts in 2003."
The anti-piracy campaign does appear to have dented Internet piracy levels worldwide – the number of illegal music files on the Internet has fallen over the last nine months by 20 per cent to 800 million in January 2004.
However, while there has been a fall in the number of files on the best-known FastTrack network (which hosts the Kazaa service), there has been an increase in the number of files on other peer-to-peer networks, according to the IFPI.