Why piracy brings £200m to the music industry

09:37 04 November 2009

Illegal file-sharing isnÂ’t hitting the music industry as hard as most people believe.

In fact, the unlawful act brings £200m in additional revenue to the music industry every year, new research by leading think tank Demos has revealed.

However, the government is taking a different viewpoint. Business secretary Lord Mandelson confirmed last week that the net services of persistent illegal file-sharers will be blocked from summer 2011.

The "three strikes" approach will involve staggered warning letters being issued to offenders.

Should those fail, their internet connection will be suspended if they continue to illegally file share, causing civil rights groups to argue that disconnecting a person from the internet is an invasion of their civil liberties.

In addition, a poll conducted by Ipsos MediaCT for Demos found that use of peer-to-peer file-sharing sites does not actually dent the popularity of their legal download service counterparts.

In the survey of 1,008 online adults aged 16 to 50, 83% of people who admitted to regularly downloading music illegally said that they purchased the same amount or more material from legal sites after they had tested the waters.

42% confirmed that they used illegal downloads as a way of trying a product before they actually buy it, allowing their music tastes to broaden to accommodate more potential products instead of just buying music that they knew already. This trend is akin to borrowing a book from a library, only to buy it later on.

The findings suggest that illegal downloading sites could be used to prop up the supposedly failing record industry.   

On average, regular illegal file-sharers spent £77 per month downloading music tracks from legal sites. This figure is on average £30 more than the people who claimed never to use illegal sites at all.

Demos concluded that illegal downloaders are providing the digital music industry with £200m in additional revenue per year that otherwise wouldn’t have existed.

Another finding of the think tank was that two thirds of users would cease to use pirate outlets if viable and affordable legal alternatives were available to them.

61% of users would stop using the illegal sites if they were faced with a fine, while 23% would opt to stop if friends and family disapproved of their actions.