While downloading music illegally may seem like all the rage, it turns out that it's quite the contrary. According to a report from the NPD Group, the volume of illegally downloaded music from peer-to-peer (P2P) services declined 26% in 2012 compared to 2011. The number of users downloading music illegally also dropped 17%.
However, the NPD Group says that P2P wasn’t the only illegal activity experiencing a decline. Music files burned and ripped from CDs owned by friends and family also fell by a whopping 44%, and the number of files swapped between hard drives and flash drives dropped 25%, with the volume of music downloads from digital lockers decreasing 28%.
NPD attributes the drop in illegal music activity mostly to free music-streaming services like Spotify and Rdio. They say that nearly half of those who stopped illegally downloading and sharing music said it was because they started using free and legal streaming services as their primary music outlet.
NPD also says that P2P file sharing actually peaked in 2005, when one out of every five internet users aged 13 and older (approximately 33 million users) used such illegal means to download music. However, with the advent of free music streaming, users have had fewer reasons to illegally download music, and the music labels and artists are still making their share of royalties from the streaming services.