A report just issued by the Organization for Economic Cooperation and Development (OECD), an alliance of developed nations, has concluded that peer-to-peer (P2P) networks are not solely to blame for any drop in music sales, and that other factors also may be at work.

The report, titled "Digital Broadband Content: Music," prepared by the Working Party on the Information Economy for the Directorate for Science, Technology and Industry of the OECD, begins by noting that there are a large number of legitimate online music services available to consumers. Indeed, "access to broadband and technological developments have led to the rapid creation of online music services that change the way music is accessed and consumed."

According to the report, "the overall digitization of music, changing ways of listening to music, the diversification of delivery platforms and sharing are likely to have increased the time listened to music." However, "the unauthorized downloading of copyrighted content over the Internet has raised considerable concerns."

The report notes that in 2003, the value of global recorded music sales was approximately $32 billion. OECD countries accounted for about 94% of that market. One can reasonably infer that the value of global recorded music sales has only gone up since 2003.

Turning to P2P, the report states that as of October, 2004, there were almost 10 million simultaneous users on all P2P networks. The United States comprises more than half of the simultaneous file-sharing users.

The OECD acknowledges in the report that the use of P2P networks to exchange unauthorized copyrighted material "presents a significant challenge to the music industry and to enforcement of intellectual property rights." The report states that "there is currently a considerable volume of copyright infringement that is taking place among users of peer-to-peer networking software," and that "this unfair competition puts pressure on legitimate online music and other content services and may have slowed commercial services that offer access to online content."

Still, the report comes out and declares that "it is very difficult to establish a basis to prove a causal relationship between the size of the drop in music sales and the rise of file sharing." Instead, the OECD opines that sales of CDs and the success of online music services "likely" have been affected "to some degree" by other factors, such as "physical piracy and CD burning, competition from others, newer entertainment products and faltering consumer spending in some markets."

The report concludes that if "Internet-based piracy is effectively addressed, licensed file-sharing and new forms of 'super-distribution' could be important growth factors." Thus, the stated challenge is to "make file-sharing a business model for the licensed delivery of copyrighted material." That's easier said than done, as most P2P networks operate in an unlicensed manner.

So, what is the upshot? Yes, the availability of digital music online probably has increased music listening time. And yes, while P2P networks are not the only source of infringement of copyrighted works of music, and there are other causes, P2P networks certainly do facilitate such infringement in certain instances. No doubt then, the music industry will continue to search for ways to license digital music content while attempting to ward off infringement.

Eric Sinrod is a partner in the San Francisco office of Duane Morris (www.duanemorris.com), where he focuses on litigation matters of various types, including information technology disputes. His column appears Wednesdays at USATODAY.com. His Web site is www.sinrodlaw.com, and he can be reached at . To receive a weekly e-mail link to Mr. Sinrod's columns, please send an e-mail with the word Subscribe in the Subject line to .

Reprinted here with permission from USAToday.com.