Illegal filesharing costs British Music £1.1bn : 4:4:2006

*Filesharers cut their expenditure on music by £1.1bn over three years 

*BPI announces two more court wins as filesharer settlements pass the 100 mark 

*Signs that litigation campaign is working as percentage illegally filesharing declines 

Illegal filesharing costs British Music £1.1bn : 4:4:2006

*Filesharers cut their expenditure on music by £1.1bn over three years 

*BPI announces two more court wins as filesharer settlements pass the 100 mark 

*Signs that litigation campaign is working as percentage illegally filesharing declines 

UK record industry trade association the BPI today revealed research indicating that the cost to British music of illegal filesharing reached £1.1bn in the three years to 2005. 

New figures from independent research company TNS Worldpanel estimate the cost to British music in 2005 of people illegally filesharing rather than paying for music was £414m.

 Added to the £278m lost sales in 2003 and £376m in 2004, the loss to British music over the past three years is estimated at £1.1bn, or approximately £650m at trade value. BPI chairman Peter Jamieson said,

“The UK record industry is the biggest single investor in British music. Too often people believe that when they take music illegally over the internet it is a victimless crime. But when people share music files illegally, they are stealing the future of British musicians and the people who invest in them.

” For the past three years the BPI in conjunction with the BVA (British Video Association) has commissioned TNS to investigate the financial impact to the music and video industries of downloading via the internet.  In 2005 questionnaires were sent to half of TNS’ 15,000 Audio Visual Trak panel of 12-74 year olds in Great Britain, with a response rate of 44%, giving a total sample of 3,317 respondents. 

The TNS panel monitors consumers’ actual purchasing behaviour over time.  This removes reliance on individuals’ memories of past purchasing behaviour for specific time periods.  Using this type of data it has been possible to measure the cost of downloading to the UK record industry by comparing the expenditure pattern of illegal filesharers with that of non-filesharers.

 It is this comparison which has produced the figure of £1.1bn lost to the UK record industry over the past three years.

 As the table below indicates, the impact has been particularly acute on singles sales where an overall decline of 9% on singles buying rises to 34% for illegal downloaders. The substitutional effect is clear.

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Change in spend on entertainment products (Illegal downloaders vs. total market) 

Singles (illegal downloaders; -34% | total market; -9%)

Compilation Albums (dl; -27% | tm; -22%)

Total Albums (-14% | -1%)Total Music (-16% | -2%)

 Total Video (-14% | -3%)Total Games (-24% | -3%)

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