The German music industry fell for the seventh year in a row, and the German chapter of the IFPI puts the blame on piracy (naturally). The drop in 2005 was negligable, but since 1998 sales are down 45%. Digital sales aren't making up the shortfall as online sales account for a mere 2% of total sales (as opposed to about 5% and growing in the U.S.).

Such a dismal level of legal downloading conflicts with the rosy picture painted in the IFPI's 2006 Digital Music Report. "Already in the UK and Germany - two of the biggest digital markets worldwide - legal buyers from sites like iTunes, Musicload and MSN actually exceed illegal file-swappers," said IFPI Chairman and CEO John Kennedy. If that's the case, the real reason sales are lagging in Germany is due to legal sites' inability to grow and penetrate the market, not any negative effects of file sharing.