22 August 2014Copyright

Music piracy to blame for “major revenue leakage”, report says

Piracy is still responsible for “major” revenue losses in the music industry, according to a report from UK-based research and analytics service Juniper Research.

Its Streaming, Download & Legacy Services 2014-2019 report, published on Tuesday (August 19), looks at developments in the industry and the major challenges it faces.

“As digital services are rapidly taking over the music industry and as new technologies and business models emerge on a yearly basis, legislation has to keep up in order to provide the legal grounds for the industry to evolve,” Juniper said in a statement on its website.

The digital music industry will experience slow growth in revenue over the next five years, it predicted, from $12.3 billion this year to $13.9 billion in 2019.

While streamed music services are still reporting strong performances, it said that this is offset by a decline in revenues from “legacy services”, which include ringtones.

It found piracy to be a particular problem in the emerging markets, observing that in China only a small percentage of content is legally acquired.

However, in some areas, this activity had been “successfully reined in”: for example, Singapore has introduced a bill that allows the blocking of sites that contain infringed content, it said.

Music consumption is set to become a highly sociable activity, the report added. Social media will be increasingly integrated into online music platforms, but streaming companies are faced with the challenge of expanding their pools of subscribers and making music discovery easier for them.

“Juniper believes that smartphones and tablets will be the main platforms of growth, although digital music revenues on the PC/laptop will remain robust over the forecast period,” Juniper said.

“Additionally, emerging markets are expected to strengthen in terms of digital music consumption, as disposable income levels continue to rise and streaming services expand into these regions.”

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