An interesting sub plot of the IFPIís piracy report that no one seems to have picked up on is that the illegal CD market is undergoing its own downturn. In fact it is almost mirroring the legitimate industryís growth, but with a few years lag: the value of the of the illegal CD market has grown by 12% since 1999 yet in volume terms it has grown by 116%. The effective average price of a pirated CD has halved from $8 in 1999 to $4 in 2002.
The legitimate music market immersed itself in a myriad of price cuts and promotions in what was ultimately a futile attempt to stave off declining sales. It looks like the illegal sector is having to do the same. It seems that, as the cost of blank media drops and penetration of home burners proliferates, consumers are feel compelled to pay less and less for CDs. Unfortunately that is not just bad news for the pirates.