Sales of German records slumped over 11 percent last year, the second consecutive double-digit decline. For the industry there is only one cause for the drop: Illegally downloaded music from Internet peer-to-peer sites like Kazaa, Grokster and Limewire.

In response, major music labels in Germany and across Europe have teamed up to launch a so-called “Digital Download Day” to raise consumer awareness of the existence of legal digital music services.

Though the initiative is billed as a “Day”, the campaign will actually run for over a week starting April 9. During that time Internet users can legally download over 160,000 titles from most the industry giants, including Sony, Universal and BMG. Joining the effort are several smaller independent labels.

Terrified industry

All are terrified by the legacy of the first wildly successful file-sharing service Napster and the damage the industry says Kazaa and its ilk are doing to music sales. An estimated 14 million people download music for free and burn it to CDs each month worldwide, according to German music industry representatives.

Behind the Digital Download Day effort is OD2, the digital music distribution company set up by British musician Peter Gabriel in 1999. The company ran a first trial of the download concept in Britain last year. This time the event includes Germany, France, Spain, Italy and the Netherlands.

“The industry has really rallied to the call to nurture and support the legitimate music market - their support will prove indispensable in drawing the attention of music fans to this event,” said OD2 chief executive Charles Grimsdale.

Once users register for €5, they will be able to listen to and download up to three albums worth of tracks until April 15. OD2 says it has the largest catalogue of legal digital music in Europe, providing the only subscription service in Europe that offers consumers the opportunity to burn as well as stream and download tracks.

“The real mistake made was that the Internet at first was acknowledged but not really recognized as a market,” said Christoph Schick, one of the German industry initiators of Digital Download Day. “But the Internet is a future business area and we have to invest now if we want to be a part of that future. Otherwise we’ve lost everything and users will stay on the illegal file-swapping services.”

Stamping out Napster clones

He argues the music industry should have spent more time building commercial sites instead of only concentrating on stamping out illegal file-swapping services like Napster and Audio Galaxy.

“File-swapping services don’t have uniform quality and titles are often wrong or incomplete,” said Schick. “We think it will be more attractive from a central server with reliable quality and speed 24 hours a day.”

Unfortunately the German Digital Download Day site didn’t appear to offer the quality and service that most observers think it will take to wean Internet users away from other file-swapping sites.

Some of the official portals said it could take “a few days” to register before any music could be downloaded. Whether such problems can be alleviated will determine the ultimate success of the industry’s efforts.