Sales of legal digital music in the United Kingdom are well-behind expectations, according to the findings of new report from European research consultancy Entertainment Media Research.

The illegal downloading of music has "reached an all-time high," declared the "2007 Digital Music Survey," commissioned by London law firm Olswang.

Some 43% of those questioned said they downloaded music illegally, compared with 36% last year and 40% in 2005. Nearly 20% admitted they plan to continue downloading illegally in the future, when only 8% said so last year and 6% the previous year.

This year, the majority of those surveyed said they found legal downloads expensive.

Only 31% of interviewees said download prices were comparatively attractive to CD pricing, which traditionally has been targeted for being too expensive.

In 2006, 45% of the survey's respondents felt the retail prices of downloadable tracks were more attractive than those of CDs.

About 62% of this year's interviewees had heard of DRM (digital rights management) copyright-protection technology. Yet, nearly two-thirds argued that the software interfered with their rights to listen to music on any digital platform.

John Esner, a partner and the head of music at Olswang, believes the music industry should be more flexible in how it positions digital music.

"As illegal downloading hits an all-time high and consumers' fear of (lawsuit) prosecution falls, the music industry must look for more ways to encourage the public to download music legally," he said in a statement. "Variable pricing models and DRM-free music, which would allow consumers legally to transfer music to other devices, were popular among respondents and represent new ways of enticing people away from breaking the law."

The survey, conducted in June among 1,700 British consumers aged 13-60, also had bad news for the mobile music business. Only 16% of interviewees said they had bought and downloaded music to their handsets.

But a growing number said they listened to radio music via their mobile devices (25% compared with 15% in the previous year). More than half (53%) of the interviewees said they discovered music via social-networking Web sites, with MySpace, Bebo and YouTube proving most popular.

Although only 10% said they would pay to watch Web casts of live concerts, another 74% said they were "interested" in watching live gigs in that format, raising great potential for advertising funding.