Key Points:

The international digital music industry body, the International Federation of the Phonographic Industry claims that 95 per cent of all music downloads are illegal, should we be alarmed?

This statistic and other similar figures quoted in the IFPI's "Digital Music Report 2009" not only give law makers plenty of ammo to police copyright theft, but is also likely to be subject to intense debate ahead of the controversial section 92A of the Copyright Amendment Act coming into force on February 28. Trouble is, there's really no way of knowing if these statistics are actually correct.

While most agree that the level of copyrighted music illegally downloaded through file sharing services outnumbers legitimate downloads, the IFPI have come up with a more specific set of statistics, estimating that 40 billion music files were illegally downloaded in 2008, accounting for a whopping 95 per cent of all music downloads, or 20 unlicensed downloads for every legit online purchase.

Taken at face value, these statistics appear alarming enough to give the record labels and movie studios plenty of cause for lobbying governments to crack down on copyright theft.

Unfortunately in the headlong rush to bring legislation to market, no-one seems to have bothered to question the validity or the accuracy of the statistics being quoted by the music industry.

The Digital Music Report 2009 (pdf download) is a slickly produced document that makes for some interesting reading.

Unfortunately, as the old adage "research shows that 95 per cent of all statistics can be made up" show's, it's difficult not to feel that way about the legitimacy of the mountainous pile of facts and figures quoted in the Report.

Superficially the doom and gloom statistics quoted around piracy appear compelling, but as always, the devil is in the detail and it's here that things get a little suspect.

For a start, the report makes no reference as to how any of the quoted figures were actually arrived at and worse still, any mentions in the report relating volumes of illegal downloads are all estimates with no hard numbers quoted.

Short of continuously monitoring the internet activity of all internet users there is no way of accurately predicting illegal music download levels.

Basing laws such as the Copyright Amendment Act which will have huge impacts for both ISPs and internet users on potentially dodgy research and estimates is at best a house of cards and worse still, an extremely dangerous thing.

Wouldn't it make a whole lot of sense for the government to independently re-assess the claims made by the music and movie industries before foisting legislation that will cost a lot of people a lot money and cause a great deal of inconvenience? Taking the music industry's statistics as gospel when considering legislation is akin to leaving a wolf to guard the sheep pen.

Ironically, the report also showed that there was a 25 per cent rise worldwide in legitimate digital music downloads, equating to a healthy US$3.7 billion in revenue for the music industry. Could these statistics also be suspect?