HONG KONG — The music industry needs to obtain more revenue from karaoke royalties and radio stations in China to offset losses to piracy, the head of an industry association said Wednesday.
"The new business model is built on the diversification of revenue streams," IFPI chief executive John Kennedy said at a music industry conference in Hong Kong.
Revenue from CD sales still represents a big chunk of the industry's overall earnings, but its share is decreasing, and record companies need to branch out into digital music, radio and karaoke royalties, especially in China, Kennedy said.
London-based IFPI, which represents the recording industry worldwide, estimates that sales of pirated music products worldwide were worth $4.5 billion in 2005 and that nearly 20 billion songs were illegally downloaded that year.
China is a serious offender, with pirated CDs or tapes accounting for more than 85 percent of the market, according to IFPI.