Music Piracy Fell By 17% In 2012, NPD Study Finds

For all their talk about massive music piracy ruining the industry, record label executives might find it hard to explain a 17 percent decrease in piracy throughout 2012.

A new study by the NPD Group has found that peer-to-peer file sharing of music files fell to 21 million users in 2012.

NPD claims that legal streaming services such as Spotify, Pandora, and iHeartRadio all helped slow the illegal practice of music downloading.

The new study arrives just after the International Federation of the Phonographic Industry (IFPI) issued a report that suggested the first climb in global music revenues since 1999. According to the IFPI the music industry experienced a 0.3% upturn in global revenues in 2012. The study found that record labels took in $16.5 billion.

According to the NPD Group, P2P file sharing actually peaked in 2005 when 33 million people turned to the networks for their music needs.

The report suggests that nearly 40 percent of users who used illegal music services in 2011 stopped using those services in 2012.

NPD does note that 20 percent of users admitted to only stopping their illegal music download practices because of spyware and viruses. Other P2P users said their favorite service simply shut down and they did not seek out a new platform.

The survey also found that more than 50 percent of respondents simply said they like legal services more, specifically the popular Spotify program.

While the music industry for decades fought against the rise in downloadable materials, it has in recent years attempted to promote the legal streaming and downloading of songs.

While the recording industry is experiencing a small, albeit needed improvement in legal downloads, the industry continues to fight against illegal piracy.

Speaking of his company’s study NPD senior vice president Russ Crupnick states:

“In recent years, we’ve seen less P2P activity, because the music industry has successfully used litigation to shut down [P2P client] Limewire and other services. Many of those who continued to use P2P services reported poor experiences, due to rampant spyware and viruses on illegal P2P sites.”

While record labels are finally beginning to figure out a viable business model for the internet age, the war against piracy continues to mount.

As I reported last week, the new “six strikes” campaign has been put into place. Known as the Copyright Alert System the program closely monitors internet activity for US-based internet users. Anyone found downloading illegal movies, music files and other documents can face bandwidth restrictions and other penalties. The CAS has come under fire for its complete lack of oversight from outside auditors.

Here is a great explanation of the Copyright Alert System:

In the meantime much of the industry’s attacks have been focused away from consumers and towards piracy websites, applications and the sellers of illegally produced materials. That shift appears to be a sign that the music industry has found it better to foster relationships with customers rather than sending them running for the hills.

Do you think the music industry is finally beginning to understand how to operate in the online space? Or you think internet piracy will eventually find new ways to offer intellectual property at no charge?