Audio remains the most shared format by far, in terms of the total number of individual files, though in the US, one in five young “file-sharers” downloaded a movie. In 2001, 53% of Internet users aged 12-17 downloaded music files. But kids are not the only culprits. The same year, 29% of all users had downloaded music files to their computer, and more than three-quarters of adult Internet users in the US who download music indicated that they did not pay for these files.While the music and movie businesses are not about to disappear, audio and video file-sharing is seen by many as a threat to copyright and sales revenues, especially as download speeds are quickening. By 2008, revenues from DVDs, CDs and other physical media are expected to drop by 8%. A key challenge for governments and firms is to determine what part of such activity is illegal and how intellectual property rights frameworks might be adjusted to tackle it.For more information, see OECD Information Technology Outlook 2004, available at www.oecdbookshop.org. ©OECD Observer, No 248, March 2005