A staggering 95 per cent of digital music is illegal, according to the International Federation of the Phonographic Industry.
The IFPI's digital music report – which is published annually – insists that the music industry shrank in the last year and chairman John Kennedy mentions the illegal download market's impact – although his source for the 95% statistic is not made clear.
"The vast growth of unlawful file-sharing quite simply threatens to put the whole music sector out of business," says Kennedy in the report's opening statement.
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"The debate has a huge way to go, but the campaign for ISPs to act as proper partners in helping protect intellectual property is making progress.
"Governments are beginning to understand the scale of the challenge of trying to monetise content in an environment where around 95 per cent of all music is downloaded without payment to artists or producers."
The IFPI obviously has a vested interest in pushing for legislation against illegal file sharing – but Kennedy goes as far as to suggest 'the very principle of getting rewarded for creative work is at risk."
"Governments are beginning to accept that, in the debate over "free content" and engaging ISPs in protecting intellectual property rights, doing nothing is not an option if there is to be a future for commercial digital content," adds Kennedy
"The big question for 2009 – with the focus in particular on France and the UK - is what real action will result and how quick and how effective it will be in reversing the devaluation of recorded music and helping return the industry to growth."
The IFPI also highlights the growing problem of 'pre-release piracy' the leaking of albums and tracks before they are put on sale by the artists.
"The damage this and subsequent file-sharing causes can mean the difference between an album charting in the Top 10 or missing out – something that can have a huge impact on an artist's career."
The IFPI says that it has removed 3 million infringing links in 2008 – up from just half a million in 2007.