Government report highlights threat to music industry

The music industry should be concerned about the Internet according to Culture Secretary Chris Smith. Justin Pearse reports

A government report, published Wednesday, once again highlights the threat the UK music industry faces with the advent of increased consumer use of the Internet.

Culture Secretary Chris Smith called on the music industry to act now to counter the challenges posed by digital piracy and foreign competition. The report implores the industry to make it quicker and easier to buy music online and warns that failure to do so presents the very real prospect of an industry in decline.

Smith's doomsday scenario of the destruction of the music industry was backed up with stark statistics. The report found that up to 3 million MP3 files are downloaded every day. The report's online sales forecast for digital music worldwide stands at $4bn by 2004 representing eight percent of total revenue for the music market. Smith believes the UK music industry cannot afford to miss out on that potential.

"Effective ways of buying music legally online benefit consumers, the industry and the musicians of tomorrow," Smith told the industry. "If the UK music industry is to prosper it must give consumers what they need and a safe way of paying for it."

The UK music industry and government has finally woken up to both the challenges and perils posed by the online distribution of music. The good news for the future of the industry is that both sides are beginning to work together to develop a legislative and logistical framework for the future.

However if the industry is to stave off the danger of threats such as the online trading network Napster, there is work to be done on both sides.

Wednesday's report comes just weeks after the publication of the Institute of Public Policy Research published a report calling on the government to work more closely with the music industry to cope with the impact of new technologies.

Paul Brindley, author of the report, said that "the Internet is neither a panacea nor a threat for the music industry -- the threat is complacency." He warned, "the music industry cannot afford to take the success of the UK digital economy for granted," and called on the government to help "build a highly skilled and legislated digital music economy."

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