Piracy declines in US after LimeWire closure

Internet piracy is on the decline in the US, according to new study from market researchers NPD Group.

The company reports that during the last quarter of 2010, nine per cent of America's online population - 16 million users - illegally downloaded music using peer-to-peer (P2P) file-sharing services, compared with 16 per cent (28 million users) at the end of 2007 - a decline of nearly 43 per cent.

According to NPD, the average number of music files downloaded from P2P networks also fell during the same period, dropping from 35 tracks per person to 18 tracks.

NPD suggests that the apparent decline may be related to the closure of massive P2P network LimeWire in mid-2010, after a federal judge ruled against the file-sharing network in a copyright infringement case brought by the Recording Industry Association of America (RIAA).

Before it was shut down, LimeWire accounted for 56 per cent of all illegal music downloads carried out in the US via P2P networks. NPD reports that users have since turned to other services including Frostwire, whose user base more than doubled to 21 per cent of downloaders during the last two quarters of 2010; and BitTorrent, which increased from 8 to 12 per cent of users.

"In the past, we've noted that hard-core peer-to-peer users would quickly move to other websites that offered illegal music file sharing," said Russ Crupnick, an entertainment industry analyst for NPD.

"It will be interesting to see if services like Frostwire and BitTorrent take up the slack left by LimeWire, or if peer-to-peer music downloaders instead move on to other modes of acquiring or listening to music."

NPD based its findings on a January 2011 survey of 5,549 US Internet users ages 13 and over. (And if we were them, we're sure we'd cough up to copyright infringement, too...)

Big Music blames piracy for a (hotly contested) 30 per cent decline in music sales between 2004 and 2009, but recent research from the London School of Economics suggests the industry's figure of $40 billion a year in lost sales is vastly inflated.

A recent three-year study of copyright infringement in emerging markets, where piracy is endemic, concluded that most illegal copying was the result of disparities in the cost, relative to local incomes - and that cutting prices is the only way to stop piracy.