File swapping blamed for low record sales

By Ann Harrison
Network World Peer-to-Peer Newsletter, 09/18/02

The Recording Industry Association of America issued a study early this month that supports the group's claim that file trading services are undermining record sales.

The study, published by Peter D. Hart Research Associates, noted that shipments of CDs fell 7% in the first six months of this year compared with last year. It also cited Internet users who said they were downloading more music and purchasing fewer albums.

The RIAA released a statement which asserted that, "Among people who said their downloading from file-sharing services had increased over the past six months, 41% reported purchasing less music now than six months ago, compared to only 19% who said they were purchasing more music."

The findings were challenged by another study by Forrester Research issued around the same time which showed no evidence that heavy consumers of digital music were buying fewer CDs. This study pointed out that the country is in a recession and that the general economic downturn and competition from other media - not alleged music piracy - was to blame for a sharp decline in record sales.

If the RIAA was really concerned about luring cash strapped consumers and competing against online music purchasing services or file trading, it has to offer fairly-priced, consumer friendly digital content online. The subscription-based services now offered by Sony Music, AOL Time Warner's Warner Music Group, EMI Group, Vivendi Universal's Universal Music Group and Bertelsmann's BMG Entertainment, still include too many restrictions on the use of the music to appeal to consumers who are used to free file downloads. Consumers are willing to pay for music, it's a matter of creating the right packaging and incentives for them to do so.