Piracy costs EU music industry €170m per annum
May 24, 2016
By Colin Mann
A report from the European Union Intellectual Property Office (EUIPO) shows that €170 million, or 5.2 per cent of all music sales, were lost in the EU in 2014 as a result of music piracy.
- Overall, in music sales, €57 million was lost in physical formats (e.g. CDs) and €113 million in digital formats.
- This was equivalent to 2.9 per cent of all music sales in physical formats and 8.8 per cent of all music sales in digital formats.
The study, issued by the EUIPO through the European Observatory on Infringements of Intellectual Property Rights, analyses the recording industry’s direct sales of music products to domestic retailers or intermediaries. It does not include sales by music distributors, such as online platforms, or retailers.
“The question of whether piracy reduces or increases sales of recorded music has been the subject of many studies with contradictory results,” noted the EUIPO’s Executive Director, António Campinos. “Our study’s results are in line with the prevailing consensus and find that piracy reduces the revenue of legitimate industry in both digital and physical formats.”
The study is based on data from the International Federation of the Phonographic Industry (IFPI), which represents recording and music licensing companies worldwide. It analyses sales data from the 19 EU Member States where 99 per cent of all such EU sales took place in 2014.
In 2014, the German recorded music sector, by far the biggest market in the EU, made sales of €1.3 billion. Of those sales, 75 per cent consisted of music in physical formats (e.g. CDs). During that year, the German recorded music sector lost €40 million in sales from piracy, half in physical and half in digital formats.
In the UK, 52 per cent of all music sales in 2014 were digital and the total music sales were worth €1.1 billion. During 2014, the UK recorded music sector lost €49 million in sales from piracy: 25 per cent were lost in sales of physical formats and 75 per cent in sales of digital formats.
Germany and the UK together account for more than half of the physical and digital sales in the EU.
In 2014, music sales in France totalled €700 million, of which two thirds were physical sales and one third were digital sales. During 2014, the French recorded music sector lost €26.4 million in sales from piracy: €16 million were lost in digital sales and €10 million were lost in physical format sales.
Total music sales in Sweden in 2014 equalled €167 million, mainly in digital sales. €9.1 million were lost sales due to piracy and represented 7.4 per cent of all music sales, the third highest relative impact in the EU. Lost sales in recorded music in Sweden were nearly all sales in digital formats, estimated at €8.9 million.
In Spain, in 2014, music sales totalled €150 million, with 58 per cent of all sales corresponding to physical music purchases. In 2014, €9.1 million worth of music sales were lost in the Spanish music sector from piracy: €2.6 million were in physical formats and €6.4 million in digital formats. The relative effect of piracy in Spain is the highest in the EU, representing 8.2 per cent of recording industry revenues.
In 2014, €200 million worth of sales were generated by the Italian recording industry, of which 39 per cent were digital sales. In the same year, the Italian recording industry lost €7.8 million from piracy, €3 million in physical sales and €4.7 million in digital sales.