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Cd sales drop Original Source Link: (May no longer be active)
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Record labels say CD sales drop 7 pct, blame Web
NEW YORK (Reuters) - Compact disc shipments fell 7 percent in the first six months of this year versus last year as growing use of Internet downloading services undermined sales, the record industry said Monday.
The Recording Industry Association of America (RIAA), which represents the world's largest record labels, issued a study by Peter D. Hart Research Associates indicating that Internet users who say they are downloading more music also said they were purchasing fewer albums.
"Among people who said their downloading from file-sharing services had increased over the past six months, 41 percent reported purchasing less music now than six months ago, compared to only 19 percent who said they were purchasing more music," the RIAA said in a statement.
The record industry successfully defeated the first popular file-serving service Napster, which a court ruled violated copyright law by offering the ability to share digital music. Since then several similar services such as Kazaa and Morpheus have cropped up.
Earlier this month, Forrester Research issued a study saying piracy was not to blame for the sharp decline in record sales. Its study discovered no evidence of decreased CD buying among frequent digital music consumers, noting that the general economy and competition from other media were larger factors.
"I would not argue that downloading and copying are the only factors at work," Geoff Garin, chief executive of Hart Research said. "But we have clear evidence that downloading and copying do not have a favorable effect on record sales."
Jonathan Potter, executive director of Digital Media Association, a lobbying group that represents many music sites trying to promote and sell music over the Internet, said such surveys were of little value.
"The way to defeat illegal music distribution services is to offer comprehensive, innovative, fairly priced legal services," Potter said. "Until the record companies offer their content ubiquitously in a consumer friendly way, studies like this are useless."
The five major record labels -- Sony Music, AOL Time Warner Inc.'s Warner Music Group, EMI Group Plc, Vivendi Universal's Universal Music Group, Bertelsmann AG's BMG Entertainment -- and other companies are trying to trying to win users over to subscription-based services. But none have reached the mass appeal enjoyed by the unauthorized services.
Garin said the survey tried to get an understanding of what would inspire consumers to abandon the free file-sharing services, although the results were not made public.
"We do know that consumers don't have a very high recognition of what the alternatives to the free services are," Garin said. But he added that subscription services will find it difficult to compete with free services.
Potter remained unconvinced. "I'd like to introduce the recording industry to something called bottled water," he said, referring to an example of successful retail items that are also easily available for free.
"The point is if there were a high quality product that was affordable and available across multiple services, they would be able to defeat the free services," he said.
The RIAA's survey is based on 860 music consumers with Internet access between the ages of 12 and 54.
The survey also found that the number pirated compact discs acquired by Internet users has doubled from a year ago. Asked when they hear a song they like by an unfamiliar artist, 20 percent of the respondents said they would download the song for free, while 14 percent said they would buy the album.
For respondents between 12 and 18 years of age, 35 percent said they would download the song for free, while 10 percent said they would buy the album.
Reuters/Variety
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08/26/2002 19:08
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