Downloads 'cost industry £650m'

Illgal downloads cost the music industry £650million in the past two years, it was claimed yesterday.

Record labels lost £376million last year, up nearly £100million on the £278million in the year before.

The figures, the result of a two-year study commissioned by the British Phonographic Industry, is the music business's first attempt to work out the financial cost of illegal downloads.

The research used market trends and details of buying habits to estimate music fans would have spent about £1.5billion between 2002 and 2004, but because of downloads spent only £858million.

A BPI spokesman said: ' Unfortunately, we did not start measuring these figures until 2002 but I would say the industry has been affected since 1999 when the first illegal downloading site was set up and it all took off.'

The association's chairman, Peter Jamieson, said illegal file sharing had claimed hundreds of millions of pounds in lost revenue, much of which would have been invested in new British music. 'Although the legal downloads business is growing at an impressive rate it does not even begin to offset the damage done by illegal file sharing,' he added.

The figures were revealed as it was announced a High Court judge had granted an order requiring five Internet service companies to hand over the names of another British 33 file sharers, accused of illegally distributing more than 72,000 tracks.

This latest court move comes after the BPI took action against 31 file sharers last month, fining at least ten parents of illegal downloaders, the director of an IT company and other people up to £4,500 each.