Illegal-filesharing topped 33 million albums and 10 million singles in H1 2012 in the UK, according to a new report.
Musicmetric has released a study that suggests that more than twice as many albums were downloaded illegally over the six-month period as were legitimately bought through digital outlets.
Conclusions have been drawn from the data suggesting that the illegal download activity equates to £500m in lost revenue at retail, although that assumes that all illegal downloaders would have bought a particular album had piracy not been an option.
The Musicmetric analysis – the inaugural Digital Music Index – looks at the music downloading habits of the nation, logging approximate locations of users obtaining files via BitTorrent.
In 459 of the 694 cities, Ed Sheeran is the most illegally downloaded artist so far this year with album +.
London was the top location for illegal downloads in the first half of the year, accounting for over seven million pirated files - mostly full albums.
The highest levels of piracy based on downloads per person, however, were found in Manchester.
"It shows that illegal downloading remains a significant problem," Geoff Taylor, chief executive of UK music industry body the BPI, told BBC News.
"It is having a significant effect on investment in new music. That remains our serious concern."
Taylor went on to outline just how much of an impact piracy has on every sector of the music industry: "It's on session musicians who play in the studio; it's on the engineers and tape ops in the studio; it's on the guys working in a PR company trying to get coverage; it's on the marketing department; the guys in legal who are doing the contracts.
"We are losing hundreds of millions of pounds a year that should be getting invested into new music."
Ed Sheeran, however, seemed unflustered by piracy figures at Radio 1’s Hackney Weekend in June. He said that, although around 8 million of the 9 million people that have his album in the UK are illegal downloaders, he is still selling albums and gig tickets, concluding, “It’s all relative”
Geoff Taylor, however, wants to appeal to the country’s sense of “fair play” saying, "We just need to get over to them the harm that they're doing to investment in new British music.
"If you love music, download legally because that's the only way we can keep on giving you great music."
The UK comes second in the worldwide chart of BitTorrent downloads in the first six months of 2012 with 43,263,582, coming second to the US with 96,681,133.
Speaking of the new report, Musicmetric CEO Gregory Mead said, “Knowing exactly where your fans are has long been a holy grail for record labels. Understanding what drives them to engage will be vital to helping the industry to really prosper in the coming years.
"For the first time, we have evidence that blocking Pirate Bay had little effect on BitTorrent downloading. It is also clear however, that availability of streaming services like Spotify does reduce this activity as people have greater access to music they want via legitimate means.
"The challenge for copyright holders is to find ways to monetise music files torrented online," he added. "The potential for converting revenue lost through file trading is not entirely a fairy tale, however it will differ with different genres and life stages of artist.
"While the file sharing network is largely ignored as a proactive channel, little progress can be made on figuring out how this might be possible.
"Clarity on the drivers between social media, file sharing and gig activity is what can deliver the industry and in our report these are being put under the microscope for the first time, which could prove a major turning point for the music industry.”
Matt Mason, executive director at BitTorrent added: “Musicmetric’s findings offer a fascinating insight into the realities of the market which are essential if we want to see the music industry get back to its peak. These figures show for the first time that blocking the Pirate Bay had zero effect on piracy.
"It's short-sighted to think that we can simply tell people to stop and they will, but great data like this will help companies build better services and platforms that empower artists to distribute their work into the BitTorrent ecosystem in ways that make sense for them," he added. "Consumers have used the BitTorrent protocol for over decade because it's the best way to move large files. That's true for musicians too. The challenge is building the right business models on top of the technology, which is something we're very committed to here.
“The opportunity here lies in creating immersive and innovative packages of content for real music fans – and this is something we’re increasingly doing with global artists like Counting Crows and DJ Shadow. The more people grasp the options at their disposal to better engage with fans through BitTorrent, the quicker we’ll see all the fantastic artists and content creators around us prosper again.”
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