Illegal CD copying and music downloading could put the jobs of 600,000 people in the music industry at risk, according to a senior official.
Jay Berman, head of the International Federation of the Phonographic Industry (IFPI), said all jobs in the European music industry could be in jeopardy if record executives do not tackle the problems. "They are all potential victims of online music piracy," he said.
He urged major record labels to do more to promote official download sites and lobby for more strict European copyright legislation.
"In truth, online music piracy is not about free music," he told music executives at the annual Midem conference in Cannes, France.
"The music creators and rights holders, denied the right to choose how their music is used and enjoyed, are in fact paying the price."
His warning came days after one of the UK's biggest stars, Robbie Williams, told fans that he thought music piracy was a "great" idea and that record companies did not know how to deal with it.
"There are a lot of artists out there who haven't signed Robbie-like deals," Mr. Berman responded, referring to Williams' reported £80m deal with EMI.
A prolonged slump in CD sales has been blamed on fans downloading songs from royalty-free websites and an increase in the ease of copying, or "burning", CDs on home computers.
Mr. Berman said such activities meant record companies would be less able to develop new talent.
He also accused the telecommunications industry of sabotaging new European legislation – the Copyright Directive -, which would force internet service providers to crack down on copyright infringement.
The Copyright Directive is still to be implemented by 13 of the 15 European Union member states.
In the first half of 2002, global music sales fell by more than 9%, and the industry is facing a slump for a fourth straight year.