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Are the pirates all washed up? Illegal file-sharing plummets in 2012

Thanks to the increased use of free music streaming services, illegal peer-to-peer (P2P) music file-sharing "declined significantly" last year, according to a new report from The NPD Group.

The volume of illegally downloaded music files from P2P services dropped 26 per cent in 2012 compared to the previous year, the research firm said.

Moreover, 40 per cent of those who had illegally downloaded music via P2P services in 2011 reported that they had either stopped altogether, or downloaded less.

Illegal P2P activity wasn't the only music-sharing activity to decline. Consumers last year also curbed their habit of ripping CDs from friends, swapping files from hard drives, and downloading music from digital lockers.

Why the decrease in music sharing? According to the report, consumers are increasingly relying on free, legal music streaming services like Spotify.

Nearly half of those who stopped or curbed their file-sharing habit cited the use of streaming services as their primary reason for stopping.

"For the music industry, which has been battling digital piracy for over a decade, last year was a year of progress," Russ Crupnick, senior vice president of industry analysis at NPD, said in a statement. "Among other factors, the increased use of legal and licensed streaming services has proven to be an alternative for music fans who formerly used P2P networks to obtain music."

Another 20 per cent of former P2P users said they reduced or stopped their illegal file-sharing activity because their preferred service was closed, or that the services lead to issues with viruses and spyware.

"In recent years, we've seen less P2P activity, because the music industry has successfully used litigation to shut down 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," Crupnick said.

Overall, the number of consumers using P2P services to download music declined 17 per cent last year compared to 2011, the research firm said. When P2P file-sharing peaked back in 2005, one in five Internet users aged 13 and older, or about 33 million people, used P2P services to download music. Last year, that number fell to 11 per cent, or about 21 million people.

Illegal file-sharing was in the news recently after the US Center for Copyright Information announced that a new "six strikes" Copyright Alert System is now ready to go live. As part of the effort, users will get a notice from participating ISPs if they are suspected of illegal downloading. If they ignore that message, the ISP might resort to pop-ups, redirect them to special websites that display the alert, or take other measures.