- The Washington Times - Monday, November 4, 2002

From combined dispatches
Internet sales of recorded music such as compact discs and cassette tapes fell 39 percent in the third quarter as more consumers traded and copied music online, according to a survey to be released today.
U.S. Web music sales fell to $121.6 million from $198.9 million a year earlier, said ComScore Networks Inc., an Internet research company. The number of consumers using programs to swap music and other files over the Internet at home rose 19 percent in September from a year ago.
Music sales via the Internet this year have reached $545 million through the third quarter, well behind last year's total of $730 million for the same time period.
The study showed former Napster users flocked to alternative file-sharing networks, such as Kazaa and Morpheus. After Napster went off line for good in summer 2001, Morpheus' user base grew from less than 1 million in June 2001 to 7.2 million in March 2002, ComScore found.
Phil Leigh, an analyst for Raymond James & Associates, said consumers increasingly are seeking the instant gratification from free downloads with which online CD orders can't compare. The ability to burn those downloads to blank CDs offers computer users even more personalization and choice that CDs don't offer.
"The primary message of the CD burner is the consumer doesn't want to be straightjacketed into buying a prepackaged CD," Mr. Leigh said. "I think what we're seeing is not only the death of the physical form factor, but the death of the prepackaged concept."
Legitimate ways to buy downloads online include Listen.com's Rhapsody service, as well as MusicNet and Pressplay, two joint ventures begun by the major recording companies to counter illegal song-sharing.
But those services have yet to release any figures on how many people have signed up, and it is hard to gauge their popularity in the face of free downloads from Morpheus and Gnutella network programs.
Mr. Leigh said free downloads and CD burning have liberated the consumer "so that she can have what she wants on a disc, and not three [songs] she wants and five she doesn't."
The study considered online purchases of physical recorded media, including CDs and cassette tapes, for its study and did not look at paid music downloads.
The Recording Industry Association of America joined with recording artists, EMI Group Plc, Vivendi Universal SA and others in September for a multimillion-dollar advertising campaign to combat the illegal downloading of music from the Internet.
"All legitimate businesses online have an incentive to fight piracy," said association spokeswoman Amanda Collins.
In September, the chief executive of the Recording Industry Association of America testified before a House hearing on music piracy and peer-to-peer networks. Hilary Rosen said that public education about the illegality of unauthorized file-sharing was of the utmost importance.
"I wish I could tell you that there is a silver bullet that could resolve this very serious problem," she said. "There is not."

LOAD COMMENTS ()

 

Click to Read More

Click to Hide