According to the International Federation of the Phonographic Industry (IFPI), the majority of music downloaded in 2008 was done so without payment to either artist or record label.
This means the UK record industry lost £180m last year, says the IFPI, and will lose more than £1bn by 2012 if nothing is done.
Still, legal online music sales remain healthy, with UK sales up 45 percent in the first half of 2008.
A total of 110 million tracks were downloaded in 2008, up 42 percent on 2007. Digital album sales also rose sharply, by 65 percent to 10.3 million, and now account for 7.7 percent of the total albums market.
The top 10 downloads in 2008 were:
1) I Kissed a Girl - Katy Perry
2) Mercy - Duffy
3) Sex on Fire - Kings of Leon
4) Rockstar - Nickelback
5) Hallelujah - Alexandra Burke
6) American Boy - Estelle
7) Black & Gold - Sam Sparro
8) 4 Minutes - Madonna/Justin Timberlake
9) Run - Leona Lewis
10) Dance Wiv Me - Dizzee Rascal