The report from the Organisation for Economic Co-operation and
Development(
OECD
) says that on-line music distribution
is set to grow over the next few years, from around 1–2% of total
music sale revenues currently to 5–10% of revenue by 2008.
This, says the report, will create positive and significant
economic ripple effects for the consumer electronics manufacturers,
and the
PC
and telecom industries, meaning that growth
in the sector will have implications for a wide range of players,
including artists, consumers, the record industry, and new digital
intermediaries, such as digital rights management software
companies.
In principle, says the report, file-sharing software is an
innovative and promising technology, although it is currently
abused by the many
P2P
users who take advantage of the
software to make unauthorised copies not only of music, but
increasingly also of video and software.
This piracy has had an undoubted effect on the music industry,
although the
OECD
does not consider that file-sharing
is solely to blame.
“It is very difficult to establish a basis to prove a causal
relationship between the size of the drop in music sales and the
rise of file sharing,” says the report. Physical piracy,
CD
burning, lower consumer spending and competition
from other entertainment devices have also played a part.
However, it predicts that internet-based piracy is likely to be
reduced as licensed file-sharing and new forms of
super-distribution evolve.
Last year marked a turning point in the development of the
technology, says the
OECD
, with the launching of a
range of legitimate on-line music services, notably Apple’s iTunes.
By the end of 2004, there were 230 sites offering over one million
tracks on-line in the
US
and Europe.
Presenting itself as one of the first roadmaps as to how public
policy regarding on-line music distribution should be re-evaluated,
the report calls for policies balancing the interests of suppliers
and users in areas such as the protection of intellectual property
rights and digital rights management (
DRM
). These
polices should not disadvantage innovative e-business models and
new technologies.
Given that the on-line distribution of content is a relatively
new phenomenon, legal frameworks involving issues such as rights
protection technologies and secure micro-payment systems may also
need to be revisited, says the
OECD
.
