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RIAA: Piracy hits CD sales again

12% decrease in shipments follows last year's 7% drop

The RIAA has sounded the music piracy alarm again, blaming illegal CD copying and Internet file-sharing networks for a nearly 16% decline in total U.S. music shipments in the first six months of the year.

Total music format shipments, which includes direct and special markets, dropped to 335.6 million units this year, down from 398.5 million in the first half of 2002. In dollar value, this reps a 12% decrease to $4.8 billion from $5.5 billion.

The first-half decline in CD shipments follows last year’s 7% drop in overall CD shipments.

Shipments of music products to retail outlets, however, declined only about 10% in the first half of 2003, representing a 9% drop in dollar value compared to 2002.

“While there are other factors contributing to the decline of music shipments in 2003, including the fact that there are significantly fewer music retail locations, illegal file ‘sharing’ continues to adversely impact the sale of physical CDs,” RIAA president Cary Sherman said.

The RIAA is gathering evidence and preparing lawsuits against individual computer users who are illegally offering substantial amounts of copyrighted music over peer-to-peer networks.

Last year, the music industry ended up shipping just over 800 million units, a drop of 9% from 2001. CD sales, as counted by SoundScan, hit about 640 million in 2002. Piracy was blamed for that decline as well.

The RIAA’s mid-year shipments numbers are compiled by the accounting firm of PricewaterhouseCoopers using data from companies that distribute approximately 90% of the pre-recorded music in the States. To calculate an estimate of unit shipments and dollar values for the remainder of the market, PricewaterhouseCoopers uses retail sales data from SoundScan.

The last two years have seen an avalanche of superstar releases in November tied to the holiday season, giving the music biz a sales lift. Latter part of this year will see releases from Black Rebel Motorcycle Club, Missy Elliott, Alicia Keys, Ludacris, John Mayer, P.O.D. and Sting. To date, the year’s biggest sellers have been 50 Cent’s “Get Rich or Die Tryin’ ” at 5.8 million copies and Norah Jones’ “Come Away With Me” at 4.2 million.

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