Global Record Industry Numbers Down (Again)

Stuart Freen is a JD candidate at Ogsoode Hall Law School.

The International Federation of the Phonographic Industry (IFPI) recently released its annual Recording Industry in Numbers report, and the numbers are grim indeed: Global recorded music revenues fell 7%, amounting to a whopping US$ 17 billion decline. Canada meanwhile was given a failing grade with a 7.4% decline, a number the IFPI was quick to blame on our country’s delinquent copyright laws. On the bright side, the report trumpets a return to growth in several key markets, including the UK, Australia, India, South Korea and Sweden. The release of the report has driven Canadian copyright watchers into a tizzy, with everyone from Michael Geist to numerous Globe and Mail writers offering up their own perspective.

Regarding Canada’s declining revenues, the report is harsh:

Spain (-14.3%) and Canada (-7.4%), countries with some of the world’s weakest legal defences against piracy, show the sharpest falls… Canada, practically the only government of a developed country not to have implemented international copyright treaties agreed over a decade ago, is a major source of the world’s piracy problem. A disproportionate number of illegal sites are hosted on Canadian soil.

This, despite the fact that Canada’s decline is essentially on average with the rest of the world and is not among the worst offenders by far.

The report credits the growth experienced in 13 markets  worldwide to increased anti-piracy efforts and a rise in digital music sales. Digital sales (including online and mobile channels) have steadily expanded since 2004, with digital sales now accounting for as much as 25% of record industry revenues overall.

As James Gannon notes, several of the growth countries either introduced new anti-piracy legislation in 2009 (South Korea, Sweden) or are talking tough about their intention to do so (UK, Australia). Graduated response schemes, whereby ISPs are compelled to cut off infringing users’ internet access, are gaining traction in many developed countries and evidence suggests that they do deter peer-to-peer file sharing. Stronger anti-piracy measures coupled with the growth do appear to lend some credence to the IFPI’s claims that tougher laws will eventually save the music business.

Canadian copyright watchers were quick to offer opinions on the report’s significance. Michael Geist criticized the report for singling out Canada, comparing it to the US Special 301 report. The 301 report, which coincidentally came out only a couple days later on April 30, is an industry-driven exercise that annually places Canada on an “IP delinquent” list along with countries like China. Professor Geist suggests that the IFPI is essentially trying to shame the Canadian government into copyright reform.

The Globe and Mail published no fewer than three articles and/or blog posts on the report, with a couple of them seemingly reveling in Canada’s “bad boy” status on the global piracy scene. While this might seem like a bit of an odd position for newspaper to take (given the medium’s precarious status online), it does reflect the relaxed attitude Canadians have toward media piracy.

Toronto lawyers Barry Sookman and the previously mentioned James Gannon (both from McCarthy Tétrault) also posted their own impressions on their personal blogs. Mr. Sookman in particular drew parallels between the report’s findings and recent record industry submissions to the Standing Committee on Canadian Heritage.

While opinions on the report have been all over the map, one thing is for certain: The world’s taste in music is at an all time low. The top grossing record of the year? Susan Boyle’s “I Dreamed a Dream”.

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