London, Jan 16 (ANI): Despite a boom in the digital music business, 95 per cent of downloads are still illegal and not paid for, according to a report.
the International Federation of the Phonographic Industry's (IFPI) Digital Music Report, making money from digital music is 'the biggest challenge for music companies' at the moment.
The report has revealed that the digital music business has grown for six years in succession.
Last year, it grew by an estimated 25 per cent and is now worth 3.7 billion dollars.
Digital music now accounts for 20 per cent of recorded music sales, up from 15 per cent in 2007.
However, that success is overshadowed by the popularity of illegal downloading. More than 40 billion music files were illegally shared last year, according to IFPI.
That compares with 1.4 billion legal single track downloads in 2008, with the top-selling digital single, Lil Wayne's Lollipop, selling 9.1 million units.
The UK saw one of the biggest increases in digital sales in the first half of 2008 with sales up by 45 per cent.
British consumers downloaded 110 million single tracks in 2008 and 10.3 million digital albums were sold - accounting for 7.7 per cent of the country's albums market.
"The recorded music industry is reinventing itself and its business models," the Independent quoted John Kennedy, chairman and chief executive of IFPI, as saying.
"Music companies have changed their whole approach to doing business, reshaped their operations and responded to the dramatic transformation in the way music is distributed and consumed.
"There is a momentous debate going on about the environment on which our business, and all the people working in it, depends.
"Governments are beginning to accept that, in the debate over 'free content' and engaging ISPs in protecting intellectual property rights, doing nothing is not an option if there is to be a future for commercial digital content," he added. (ANI)