Illegally sold copies of music discs are a $4.6 billion market, with legitimate sales in some countries shrinking by as much as a third in just a few years, the International Federation of the Phonographic Industry (IFPI) said.
Online digital piracy also remains a concern, particularly in several countries with high levels of broadband Net use, the group said.
"The music industry fights piracy because if it did not the music industry would quite simply not exist," IFPI Chief Executive Officer John Kennedy said in a statement. "Billions of dollars of investment go into releasing and marketing over 100,000 albums in a single year, and this is only possible when there is good, effective enforcement of copyright."
The group's annual report is aimed at spotlighting how well specific countries are doing in fighting bootlegging and tracking changes in copyright laws around the world.
Overall, many countries have cracked down on pirated disc sales, with growth in the black market slowing to its lowest level in five years. A total of 1.2 billion illegally copied discs were sold in 2004, the group said.
However, in more than 34 countries, the total number of illegal copies sold outstripped the number of legally produced discs.
The group spotlights Canada, South Korea and Taiwan as having weak digital copyright rules or enforcement of existing rules. The Canadian government took steps this week to that would bring that country's legal framework closer to that of the United States, however.