The digital music business is booming but 95% of downloads are still illegal and not paid for, according to a new report.
Making money from digital music is "the biggest challenge for music companies" at the moment, according to the International Federation of the Phonographic Industry's (IFPI) Digital Music Report.
This was blamed on falling CD sales, while the increase in digital sales failed to make up for this.
The IFPI, which represents 1,400 companies in 72 countries, estimated more than 40 billion music files were illegally shared in 2008.
There were 1.4 billion single tracks legally downloaded in 2008, with the top-selling digital single, Lil Wayne's Lollipop, selling 9.1 million copies.
Digital music now accounts for 20% of recorded music sales, up from 15% in 2007.
But that success is overshadowed by the popularity of illegal downloading.
The IFPI estimates more than 40 billion music files were illegally shared in 2008. That compares with 1.4 billion legal single track downloads in 2008, with the top-selling digital single, Lil Wayne's Lollipop, selling 9.1 million units.
The UK saw one of the biggest increase in digital sales in the first half of 2008 with sales up by 45%. UK consumers downloaded 110 million single tracks in 2008 and 10.3 million digital albums were sold - accounting for 7.7% of the country's albums market.
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