Piracy may be commonplace, but music’s outlook is improving

Making headlines today is a report that puts some big numbers on the piracy problem.

More than three billion songs were downloaded illegally around the world via torrent in the first half of 2012, according to the Digital Music Index published by Musicmetric, a company that sells its torrent tracking services to content owners.

That is a huge number. This being the virgin index, however, Musicmetric cannot supply historical numbers with which to compare.

If it had, they would likely show unauthorised downloading is on the wane. The industry itself, in its 2012 Digital Music Report earlier this year, cites “progress” and says “the needle is moving” on the issue.

Last year, global music trade revenue fell by only three percent. In the U.S., the fall was just 0.1 percent. In other words, the decimation with which the business has become familiar has bottomed out.

Over the last year, several labels crossed the threshold at which digital gains are making up for physical losses. Here is why:

1. Legal services are blossoming

The number of easy-to-use legal, licensed music offerings, many of them offering free music to users, is growing fast, now numbering around 500 in 78 countries. Labels and policymakers alike have long believed that attractive legal services are the best antidote to piracy – and they are finally flourishing in number.

2. Governments are supportive

In countries like the UK, France, New Zealand and South Africa, labels have won government support for introducing graduated-response measures against persistent infringers, ranging from warnings to disconnection from the internet. When Sweden introduced a law under which freeloaders’ details would be shared with copyright holders, torrent traffic plummeted, albeit temporarily.

3. Labels are winning court support

Individual court decisions are also going labels’ way. Like in the UK, Finland, Denmark and Austria, where the country’s top ISPs block The Pirate Bay. In Britain, other sites pointing to unauthorised hosts are also getting taken down via injunction.

4. Intermediaries are playing ball

Search giants like Google and Baidu, enticed by the prospect of operating their own music services, are now making efforts to filter from search results links to illegally-hosted material. Likewise, payment processors like MasterCard, PayPal and Visa are working together with police to prohibit payments to unauthorised music sellers in Russia.

Several studies show freeloaders would stop downloading upon receiving just one warning. In France, where the controversial notifications agency Hadopi has been introduced, P2P use has reportedly dropped by 26 percent, pushing up iTunes Store singles sales in France by 48 percent, according to one study.

The music industry has long been engaged in a multi-pronged response to the decimation. To flourish like it did in the heyday of CDs, it needs legal adoption, piracy reduction and a range of other factors to happen all at the same time. That’s why it won’t take its foot of the anti-piracy pedal.

But, though numbers show unauthorised downloading is still commonplace, it is worth pausing to observe the industry has begun to go in the direction it wants.