Global music sales fall, hurt by consumer piracy

LONDON, April 16 (Reuters) - Global recorded music sales in 2001 fell five percent to $33.7 billion because of a sluggish global economy and increased

LONDON, April 16 (Reuters) -

Global recorded musicsales in 2001 fell five percent to $33.7 billion because of asluggish global economy and increased consumer piracy, theInternational Federation of the Phonographic Industry said onTuesday.

The trade association said demand for music remains strong, butthe proliferation of free music on the Internet and mass copying ofcompact discs have cut into sales.

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

The federation said total unit sales fell by 6.5 percent whilethe value of sales fell by five percent.

Some analysts had predicted 2001 sales could fall by as much as10 percent. In 2000, the recording industry suffered a slight fallin global music sales.

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

By region, sales in North America, the largest market, declinedby 4.7 percent to $14.1 billion. Europe declined by 0.8 percent,while sales in Japan, the second-largest national market, fell by9.4 percent, it said.

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


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

It highlighted the impact of what it called consumer piracy, inparticular CD-copying and illicit online song-swapping servicessuch as Kazaa, Morpheus Music City and the now-grounded Napster asa factor in declining sales.

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

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

The federation backed up the demonstration with data from recentsurveys in the U.S. and Germany, two markets in which downloadingsongs off the Internet and CD-burning is prolific, saying consumersthere are now less likely to shop for music.

With the economic toll of piracy costing the industry billionsof dollars in potential sales, the federation has decided to strikeback hard. It has suggested that labels adopt copy-proof CDs, butadded that the new technology must be specifically labelled so asnot to confuse consumers.

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