What's the Real Impact of Piracy on Music Sales?

The British Recorded Music Industry (BPI) released figures for music sales in 2010, sparking a debate over whether or not piracy is playing a role, or at least a significant one.

According to BPI, combined 2010 digital and physical album sales declined 7 percent overall in volume to 119.9 million. This, the organization says, is due to illegal downloads and overshadows the fact that digital singles hit a record high for the third successive year, up nearly 6 percent to 161.8 million in 2010.

"2010 showed that the digital single highs seen in the previous two years were no fluke -- music fans continue to embrace the convenience, value, and choice offered by legal download stores," said Geoff Taylor, BPI Chief Executive. "The market for digital albums also went mainstream in 2010 with nearly a fifth of sales now coming from online service.

"Yet however encouraging it is to see the digital market grow, this must be seen against the bigger picture. Despite the unprecedented demand for music and strong innovation offering consumers new ways to access music online, legal downloads are unable to offset the decline in CD sales because they are dwarfed by illegal competition."

Representing the other end of the music and downloading spectrum, TorrentFreak calls BPI's claims a bunch of hogwash.

"We're not going to argue about the exact impact of piracy in this article, but we do want to balance out the music industry's propaganda a little bit," TorrentFreak explains. "Let's start off with some key figures published by BPI last week regarding UK music sales... In 2010 the BPI reports that there are 281.7 million units sold, which is an all-time record. Never in the history of recorded music have so many pieces of music been sold, but you won't hear the music industry shouting about that . In fact, the music industry is selling more music year after year an today's figure is up 27 percent compared to the 221.6 million copies sold in 2006."

And what about the 7 percent drop in overall album sales? TorrentFreak points out that while CD sales are slumping (down 12.4 percent, according to BPI's figures), digital album sales surged 30.6 percent.

"If we believe the music industry, this drop in sales of CDs can be solely attributed to piracy. This is an interesting conclusion, because one would expect that piracy would mostly have an effect on digital sales."

See what we mean about perspective? Give both sides a read and then tell us which one you agree with in the comments section below.