Global Music Sales Fall, Hurt by Consumer Piracy
Tue Apr 16, 8:36 AM ET

By Bernhard Warner, European Internet Correspondent

LONDON (Reuters) - Global recorded music sales in 2001 fell five percent to $33.7 billion because of a sluggish global economy and increased consumer piracy, the International Federation of the Phonographic Industry said on Tuesday. The trade association said demand for music remains strong, but the proliferation of free music on the Internet and mass copying of compact discs have cut into sales.

"The industry's problems reflect no fall in popularity of recorded music. Rather, they reflect the fact that the commercial value of music is being widely devalued by mass copying and piracy," said Jay Berman, federation chairman and CEO.

The federation said total unit sales fell by 6.5 percent while the value of sales fell by five percent. Some analysts had predicted 2001 sales could fall by as much as 10 percent. In 2000, the recording industry suffered a slight fall in global music sales.

CD sales fell by 4.1 percent to 2.4 billion units, while sales of singles fell by 16.1 percent, the group said.

By region, sales in North America, the largest market, declined by 4.7 percent to $14.1 billion. Europe declined by 0.8 percent, while sales in Japan, the second-largest national market, fell by 9.4 percent, it said.

Two markets that bucked the trend in declining sales were the United Kingdom and France, the association said.

PIRACY: PUBLIC ENEMY NUMBER ONE

The group blamed a host of factors from a sagging global economy to stiff competition from DVDs.

It highlighted the impact of what it called consumer piracy, in particular CD-copying and illicit online song-swapping services such as Kazaa, Morpheus Music City and the now-grounded Napster (news - web sites) as a factor in declining sales.

In an effort to illustrate the ease and convenience of CD-burning, an IFPI official copied 25 albums worth of music onto blank CDs during a 20-minute session at its press conference.

Berman asked rhetorically: "Having done that, why would you go out and buy it?"

The federation backed up the demonstration with data from recent surveys in the U.S. and Germany, two markets in which downloading songs off the Internet and CD-burning is prolific, saying consumers there are now less likely to shop for music.

With the economic toll of piracy costing the industry billions of dollars in potential sales, the federation has decided to strike back hard. It has suggested that labels adopt copy-proof CDs, but added that the new technology must be specifically labeled so as not to confuse consumers.

There has already been some consumer backlash regarding copy-proof discs. With some, the CDs will not play in personal computers, car stereos and portable devices.

MORE COPY-RESISTANT CDs

Undaunted, Jorgen Larsen, chief executive and chairman of Universal Music International, told reporters the company will release more copy-proof compact discs as it did late last year with the "Fast & Furious" movie soundtrack.

"Because of the incredibly low number of consumer complaints we've received, I would say that on most major pop releases we would put in place copy protection," Larsen said.

He added the company would hold off for now on adopting the policy in the U.S., its largest market.

Larsen said that Universal sees potential in the nascent business of charging consumers to download songs off the Internet, but did not offer any specific details.

The major labels, including Sony Music, Warner Music, EMI, Universal and BMG, late last year launched subscription download services of their own.

But it will take at least five years for the majors' services Pressplay, MusicNet, and the other online subscription music services they've agreed to work with, to make a noticeable impact on their bottom line, industry experts say.

Larsen said he expects to see Pressplay and MusicNet strike an accord over the next six to 12 months to combine catalogs so that all five labels could have their music featured.

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LINKS

Original Article
The IFPI

DUH!!!!


:first post:

Maybe cause sales were down last year because of the economy?? If they decide to release more corrupted CDs, guarantee more people won't buy. I know damn well I won't buy a CD if it's "copy protected." Damn, I wish the friggin industry would get a clue!

econd post:

yeah!!!! you two said it!!!! same here!!!! I hope they listen!!!

:third post:

yeah and if it won't play in a cd player....... what use is the cd?????? if you make it so that you can't play it an any somewhat advanced cd player... you are making it not playable on my cd player!!! duh!!!!!! geez!!!!

:fourth post:

It could be that people are more concerned about car payment, house payment, food than cds considering a great deal or out of work right now!

Of course I have boycotted since October 2001 all major release cds!

he eh these labels need to see that man..

my greatest fear is that one of my favorite artists coming out this year will have copy protection on their albums . If this cdcpta bill passes as law I'm scared that a great label like Okayplayer will incorperate this "copy protection" scheme on their albums

I guess that no matter what kinda copy protection they use, one can always route the output of a CD player into the audio input of a sound card and copy it ~

So there we have it, the war on terror, the war on drugs, the war on CD copies.

what a battle

Follow-up.

:tenth post:

Sure, I could always go through the line in on my sound card, but the bad part is that my home cd player is a DVD player. My regular CD player (A very old '89 model Kenwood changer) is now a large paperweight....

"Because of the incredibly low number of consumer complaints we've received..."

I'd love to see what that number actually is.

"Because of the incredibly low number of consumer complaints we've received...." = 8 million complaints and still growing