Digital sales not making up for losses over piracy

ISTANBUL - Hürriyet Daily News

This file photo shows pirate CDs, DVDs and books being destroyed by Turkish authorities. Piracy, along with online file sharing, is dropping physical music sales. Hürriyet photo

he fall in sales of music records due to illegal online file-sharing and piracy has driven music producers to seek digital contracts but revenues from these contracts are not large enough to cover losses from the drop in physical sales, according to figures in the industry.

In 2010, the music sector earned 7.3 million Turkish Liras through digital contracts, including Internet providers and mobile phone operators, the Turkish Phonographic Industry Society (MÜYAP) reported on behalf of music firms.

Although the figure increased from 6.36 million liras in 2009, digital revenues have not yet reached desired levels, MÜYAP chair Bülent Forta told Anatolia news agency yesterday. This is mainly due to unlicensed peer-to-peer file sharing, Forta said.

The number of contracts for digital publication rights now stands above those of physical album publication rights, Mustafa Gökhan Ahi, a lawyer specializing in intellectual property rights, told the Hürriyet Daily News yesterday.

MÜYAP has established a digital platform through which it signs contracts with GSM operators Turkcell, Vodafone and Avea, selling music products on behalf of its more than 150,000 member firms. MÜYAP has just signed a contract with local Internet provider TTNET, while also holding contracts with social networking giant YouTube and The Orchard, which provides an online audience with Turkish records via iTunes and Spotify.

Sector size down

Digital global revenue for music producers was $3.784 billion in 2008, which is 24 percent higher than in 2007, according to Forta. However, “the music sector’s size has decreased from 160 million liras in the beginning of 2000s to 70 million today,” Forta told Anatolia. People used to buy pirated albums, as they were cheaper than the licensed ones, but now consumers prefer downloading songs for free, through illegal, virtual channels, he said.

Despite the shift toward digital sales, according to figures by the International Phonographic Producers Union, about 40 million files were shared without license in 2008. “If we calculate that a single illegal download costs sector $1, we can conclude the total loss to producers was $40 million” for that year, Forta said.

“Physical pirate sales are largely under control but illegal online download and sharing is still very common in Turkey,” Sadife Karataş Kural, a lawyer who specializes in intellectual rights, told the Daily News yesterday. Although the related legal and regulatory framework in the country is sufficient, implementing the regulations is a challenge for almost all countries worldwide, she added.

Eren Alkoç of the Musical Work Owners’ Society of Turkey (MESAM) disagrees, arguing that Turkish legislation lags behind technological developments. “The share of digital platform revenues in the total representative licensing revenues stands at 17 percent, according to October 2011 figures. However, the increase in digital media where musical works are densely used, does not match with the copyright revenues collected,” he added.

Best-selling songs

Duets and songs by Gülben Ergen, Mustafa Sandal, Sibel Can and Kenan Doğulu, as well as Rafet El Roman, are the top three tracks sold online or via mobile phone. El Roman is the second most listened to Turkish singer on cell phones and internet – with the exception of YouTube – followed by a Mustafa Ceceli and Elvan duet