NPD: Illegal File Sharing Down 'Significantly'

Good News About Illegal Downloading

The NPD GROUP has  released its Annual Music Study 2012, which found a "significant" decline in illegal music file sharing in 2012. Last year the number of consumers using peer-to-peer (P2P) services to download music declined 17% in 2012 compared to the previous year. After P2P file sharing peaked in 2005, when 20% of Internet users aged 13 and older (33 million people) used P2P services to download music; last year that number fell to 11% (21 million people).

The volume of illegally downloaded music files from P2P services also declined 26%, compared to the previous year. The study also found that the number of music files that were burned and ripped from CDs owned by friends and family fell 44%, the number of files swapped from hard drives dropped 25%, and the volume of music downloads from digital lockers decreased 28 percent.

The study found that 40% of consumers who illegally downloaded music via P2P services in 2011 said they had stopped or downloaded less music from P2P networks. Why? Nearly half of those who stopped the curtailed file sharing cited the use of streaming services as their primary reason for stopping or reducing their file-sharing activity.

"For the music industry, which has been battling digital piracy for over a decade, last year was a year of progress," NPD SVP/Industry Analysis RUSS CRUPNICK said. "Among other factors, the increased use of legal and licensed streaming services has proven to be an alternative for music fans who formerly used P2P networks to obtain music."

Another case-in-point: More than two years after the music industry forced the closing of LIMEWIRE, nearly 20% of P2P users who reduced or stopped their P2P activity cited the fact that their preferred service was closed, or that the services they used created issues with spyware and viruses. "In recent years, we’ve seen less P2P activity; many of those who continued to use P2P services reported poor experiences, due to rampant spyware and viruses on illegal P2P sites."

Ironically, the streaming sites have yet to become profitable -- and artists are complaining about the lack of adequate compensation from them. CRUPNICK discussed the situation, as well as other pressing topics impacting the music industry in last week's POWER PLAYER interview.

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