Illegal music sharing and downloading significantly fell last year according to a new report.

A new "Annual Music Study 2012" report by a global information company, The NPD Group says that illegal music file sharing has declined significantly in 2012.

In 2012, the number of consumers using peer-to-peer (P2P) services to download music has been declined by 17 percent when compared to the previous year.

In 2005 the P2P file sharing was noticeably high. One in five internet users aged 13 and older, about 33 million people, were using P2P services to download music. However in 2012 that number fell to 11 percent which means only around 21 million people used P2P service.

 The volume of downloading music files illegally from P2P services has also declined by 26 percent compared to previous year. However, NDP says, P2P was not the only sharing activity to shrink.  Music files burned and ripped from CDs owned by friends and family also fell by 44 percent while the number of files swapped from hard drive has dropped 25 percent and downloads from digital lockers fell by 28 percent.

"For the music industry, which has been battling digital piracy for over a decade, last year was a year of progress," said Russ Crupnick, senior vice president of industry analysis at NPD. "Among other factors, the increased use of legal and licensed streaming services has proven to be an alternative for music fans who formerly used P2P networks to obtain music."

The report also says that 40 percent of consumers who had illegally downloaded music using P2P services in 2011 has stopped or downloaded less music in 2012. The primary reason for reduce in download was an increased use of free or legal music streaming services.

Nearly 20 percent of P2P users who reduced or stopped their P2P activity have said that their preferred service was closed or the service they used has created issues with spyware and viruses.

 "In recent years, we've seen less P2P activity, because the music industry has successfully used litigation to shut down Limewire and other services; many of those who continued to use P2P services reported poor experiences, due to rampant spyware and viruses on illegal P2P sites," Crupnick told in a press release. 

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