RIAA blames piracy, CD burning for sales drop

Online piracy and CD burning took a significant bite out of record sales last year, the Recording Industry Association of America Inc. (RIAA) claimed Monday, as it released figures showing sluggish shipments for the record companies it represents.

While the RIAA cited both the recession and the aftermath of Sept. 11 as key factors in the decline of record sales, it said that online piracy and CD burning also played a large factor in the industry's woes.

To back up its claims, the RIAA cited a consumer survey conducted by Peter Hart Research Associates that it commissioned. According to the survey of 2,225 music consumers between the ages of 12 and 54, 23 of respondents said that they are not buying more music because they can download it or copy it for free on the Internet. Additionally, over 50 percent of respondents who downloaded free music said that they made copies of it as well, the RIAA said.

The RIAA did not reveal the methodology used in the survey, but the results compound claims that the industry has long made about the effects of easily accessible and often free online music on its market.

The number of units shipped from record companies to retail outlets and special markets dipped 10.3 percent in 2001, the RIAA said, and the dollar value of the shipments dropped from US$14.3 billion in 2000 to $13.7 billion in 2001.

In a statement released Monday, RIAA President Hilary Rosen said that given the number of consumers who said that they are copying and sharing online music instead of buying it, the group cannot ignore the impact on their marketplace.

The growth of online music has put the record companies, which were long-ago branded as a cartel, into the new and somewhat dubious position of proving themselves victims of online music trends.

Even their high-profile case against file-swapping site Napster Inc. has taken a turn against them, with the judge in the case expressing concern over their tight grip on music licensing.

It remains to be seen if this new RIAA-sponsored survey adds weight to the group's claims. The record industry is certainly not taking this threat to its business lying down. The record companies represented by the RIAA have launched their own online music sites to compete with legitimate royalty-paying rivals, and they are fighting remaining free-file swappers in court.

ITworld.com

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