GLOBAL MUSIC SALES DROP 5%

Global recorded music sales in 2001 fell 5% to $33.7 billion because of a sluggish global economy and increased consumer piracy, the International Federation of the Phonographic Industry said.

The trade group points out that demand for music remains strong, but the proliferation of free music on the Internet and the burning of CDs have significantly 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 IFPI Chairman/CEO Jay Berman, the former RIAA chief.

According to the IFPI’s most recent report, total unit sales fell by 6.5% while the value of sales fell by 5%. In 2000, the recording industry suffered a slight fall in global music sales, Reuters said.

Breaking down the results further shows that CD sales fell by 4.1% to 2.4 billion units, while sales of singles fell by 16.1%, the IFPI said.

By region, sales in North America, the largest market, declined by 4.7% to $14.1 billion. Europe declined by 0.8%, while sales in Japan, the second-largest national market, fell by 9.4%. The U.K. and France were the two markets that bucked the declining sales trend. according to a Reuters report.

The IFPI was quick to point the finger at everything from the global economy to competition from DVDs to wide-spread piracy for the declining figures.

However, the report singled out consumer piracy, in particular CD-copying and illicit online song-swapping services such as KazaA, Morpheus Music City and the now-grounded Napster 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.