Well so much for making a dent in illegal file downloading. The Digital Music Survey was done in the UK which you can get here (directly, and is a PDF) shows that illegal file downloading has picked up in the last year. With all the lawsuits, all the silly counter measures (AKA Harry Potters 20 million dollar protection bill that was killed off by one person and a camera), and all the trauma or drama that has entailed, the copyright owners still loose.

Although social networking sites such as Facebook.com and MySpace.com help increase music awareness, a reluctance to purchase legal music constrained by digital rights management, reduced fear of being prosecuted for downloading illegally and falling CD retail prices have fuelled the growth in piracy, according to Entertainment Media Research, a London-based research firm and Olswang, a United Kingdom-based entertainment law firm. Source: The Globe and Mail

How do you compete with Free? Torrent freak points out that reasons to not download were more about getting a virus or bug on the PC than ever getting caught by any form of authority. Or thinking that they were going to get caught and prosecuted.

While American’s are busy working out the good and bad issues, with RIAA on a rampage, and the Congress likely to pass the “Intended Infringement” issue, so that even having anything that could download a song or share a song will be illegal. Europe just keeps on plugging away, and the brits just do not seem to let it worry them much.

And that is ok, the music delivery systems and how the whole process needs to work. We have been here with the music industry before, and no matter what threats loom over net radio, or silliness that Eminem does on the lawsuit side with apple, free is free, people who want stuff free are always going to find a way to do something.

The question is, what is the right solution for this? We don’t think that anyone has a clue at this point, nor is there a good solution on the horizon that everyone will like.