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"While the music industry continues to face serious challenges, we are pleased that trends appear to be going in a more positive direction."
——Mitch Bainwol, RIAA Chairman/CEO on Year-End Figures

RIAA: 2003 NOT AS BAD AS 2002, BUT THAT’S NOT SAYING ALOT

Org Offers Some Hope the Bleeding Has Stopped, As Shipments Are Down Just 2.7%, With Total Sales Down 6%
The record industry will take good news anywhere they can get it.

The RIAA’s annual report shows that the value of U.S. music shipments from record companies to retail outlets declined 4.3% in 2003, which is less than last year’s 6.8% drop.

Unit shipments themselves declined 2.7% (compared to a 7.8% drop in 2002, which at least represents a slower decline rate than in previous years).

Total sales of recorded music and music videos slipped 6% to about $11.9 billion last year.

The RIAA insists the report indicates the industry is stabilizing, citing how "record companies [are] offering consumers the widest choice and variety of ways to access music ever available, including satellite radio and webcasting streams, exclusive release deals, different pricing strategies, new formats and value-added CD/DVD combinations."

Some categories even showed growth. The music video category showed an increase in value of 38.7%. The music DVD format was a particular bright spot, with a 56% increase in value and a 64% increase in unit shipments. Figures for digital downloads were not included in the report.

RIAA Chairman/CEO Mitch Bainwol hits us with his best subpoena before responding: "While the music industry continues to face serious challenges, we are pleased that trends appear to be going in a more positive direction. Record companies have taken a proactive approach to dealing with piracy, implementing educational efforts and enforcement programs that have dramatically increased awareness of the illegality of unauthorized file sharing, while at the same time ensuring that their music is available on a wide array of legal online services. However, while legitimate online services continue to proliferate and evolve to meet consumer demands, this is truly a marketplace in its infancy. Continued enforcement efforts are needed in order to create a level playing field on which legitimate online music services can compete and thrive."

Which means don’t expect the RIAA to curtail its suits against what it views as illegal file-sharing anytime soon.

Some other results:

*A strong fourth quarter helped offset a 10% decline in shipments to retail outlets in the first six months of 2003. Shipments to retail increased 5.5% during that quarter alone and helped reduce the overall, year-end decline to 2.7%. The 2.7% decline represents a 4.3% drop in suggested list dollar value compared with 2002.

*CD unit shipments to retail markets decreased 3% in 2003; 609.8 million units were shipped in 2003 compared to 628.4 units in 2002. This decrease represents a 5.1% decline in suggested list dollar value in 2003.

*Shipments of CD singles improved significantly, up 85.5% from 2002, reflecting a stronger emphasis on this market. In 2003, 8.3 million units were shipped compared to 2002’s 4.5 million shipped. This represents a dollar value increase of 84% equaling $35.9 million.

*Total U.S. music shipments, including to direct and special markets, dropped 7.2% from 859.7 million units in 2002 to 798.4 million units in 2003. In dollar value, this represents a 6% decrease.

*The three-year decline (2000-2003) of music unit shipments is 26% and the value of those units has declined 17.2% since 2000.

There’s no way that’s good news. For a complete breakout of these stats, see www.riaa.org.


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