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"A near-term decline in file acquisition should hearten music industry executives, because the bulk of this activity can be ascribed to illegal P2P sites."
——Russ Crupnick, NPD Group VP
DOWNLOADS ON THE DOWNSWING?
It Is If You Believe a New NPD Group Survey Which Shows Steep Decline in Digital Music File Acquisition after RIAA Lawsuits Were Publicized
People are downloading less since the RIAA announced its intention to target illegal file-sharers.

Yeah, we find it hard to believe, too, but according to the NPD Group, the number of households acquiring music files began to decrease in May 2003, immediately after the trade org instituted a well-publicized campaign threatening individual file sharers with subpoenas. NPD's projection of the number of households acquiring music files reached a high of 14.5 million in April 2003, but in May that number fell to 12.7 million households and declined again in June to 10.4 million households.

NPD Group VP Russ Crupnick, denying he was on the RIAA payroll, said: "Today, file sharing is the most popular method of digital music acquisition. And while we can't say categorically that the RIAA's legal efforts are the sole cause for the reduction in file acquisition, it appears to be more than just a natural seasonal decline. This decrease is sharper than the declines we're seeing in the offline retail world. In addition, because the initial drop followed well-publicized legal efforts, there's evidence to show that the RIAA's tactics may be having their desired impact on reducing file sharing among consumers."

Lefsetz is sure to be bummed at this revelation.

NPD MusicWatch Digital reports that total music files acquired per month also dropped from a high of 852 million files in April to 655 million files in June. Conversely, among those consumers who continue to download files, the average number of music files acquired actually increased from 59 in April to 63 in June. According to Crupnick, "Our data suggests that the RIAA's legal tactics have more of an effect on the attitudes and actions of lighter downloaders."

Crupnick concluded, "A near-term decline in file acquisition should hearten music industry executives, because the bulk of this activity can be ascribed to illegal P2P sites; however, it will be interesting to see in the future if these numbers turn upward again, as new paid online music services begin to break through. Now, can anyone show me how to install this Kazaa software on my computer?"

NPD MusicWatch Digital information is collected continuously from the PCs of 40,000 NPD online panelists, balanced to represent the online population of PC users.

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