Quantcast
“The lawsuits have had a profound impact on awareness and fewer people are downloading. And that’s good news.”
——Mitch Bainwol, RIAA Chairman
MUSIC BIZ ENTERS NEW YEAR ON HIGH NOTE
Sales Downturn Leveling Off, Illegal File-Sharing Dropping, but Is It Just an Illusion?
Could the worst be over for the belaguered record biz?

For the music industry, 2004 is off to a promising start, with sales dips stabilizing and, according to a widely quoted survey, dreaded free downloads and file-sharing tapering off.

But don’t crack out the bubbly quite yet.

Year-end sales figures show that overall sales fell less than a single percentage point from 2002. Total CD Album sales were down just 2%, from 649.5 million in 2002 to 635.8 million last year. In 2002, CD sales were off 8.7%, from 712 million in 2001.

A strong fourth quarter contributed, with the overall music business up 10.5% compared to a similar period last year. Q4 album sales were also up 5.6%, while December CD album sales were up 6.1% over the year before. In the last week of the year, sales climbed 20%, led by hit albums from OutKast, Alicia Keys, Toby Keith and Josh Groban.

50 Cent’s Get Rich or Die Tryin’ was the year’s best-selling album, with 6.5 million in sales, compared to last year’s champion, The Eminem Show, which sold 7.6 million.

The largest category for album sales remains R&B (150 million, down from 162 million), followed by Alternative (128 million, up from 126 million), Rap (77 million, down from 85 million), Country (69 million, down from 77 million) and Christian/Gospel (47 million, down from 49.6 million).

UMVD led the way in total album sales (current and catalogue) with 28% marketshare (down from 29%), followed by BMG (15.4%, up from 14.8%), WEA (16.4%, up from 15.9%), Sony (13.7%, down from 15.7%) and EMD (9.67%, up from 8.43%).

The other good news surrounded illegal file-sharing. In a poll conducted by the Pew Internet and American Life Project, the number of people downloading files has droped 75% since the middle of last year, when the RIAA began suing people accused of making large numbers of songs available for downloading.

In a survey of 1,358 Internet users, the percentage of those downloading music dropped from 29% in spring to 14% in winter. More than 19.2 million digital tracks have been sold legitimately from June 29, 2003 to the end of the year.

Of course, these figures include both legitimate services such as iTunes, MusicMatch, Rhapsody and Napster, as well as the so-called illegitimate sites such as KaZaa (off 15% from Nov. 2002 to Nov. 2003), WinMX (down 25%), BearShare (down 9%) and Grokster (down 59%). Recent stats show that the legal download services are growing, though. RealNetworks’ Rhapsody has gone from 250k to 350k suscribers over the last quarter of the year.

Naysayers dispute the findings, pointing out that not only are people loathe to admit in surveys they illegally download music, but that other, lesser-known file-sharers such as BitTorrent, eDonkey, eMule and Carracho were not included in the poll.

Former Grokster President Wayne Rosso insists, “I completely discount it all,” while BigChampagne’s Eric Garland told the N.Y. Times, “If anything, file-sharing is still on the rise, both in terms of the number of users and the volume of material.”

RIAA boss Mitch Bainwol isn’t about to declare victory, though he’s pleased. “The lawsuits have had a profound impact on awareness and fewer people are downloading. And that’s good news.”

Of course, the battle between the industry and the digital pirates continues. Last month, a U.S. court declared the RIAA must obtain subpoenas before targeting any illegal file-swappers, while the Dutch Supreme Court declared KaZaa is not violating any copyright laws for music or movie files swapped using its software.

HITS LIST IS
IN THE MAIL
A not-so-subtle reminder to fill out that ballot. (10/15a)
NEAR TRUTHS: THE LONG AND WINDING ROAD
The lives behind live music. (10/14a)
HARVEY MASON JR.:
THE HITS INTERVIEW
The Grammy chief takes our call. (10/14a)
RAINMAKERS 2020: COMING SOON
It will rain again this fall--we guarantee it. (10/13a)
STEVIE WONDER PARTNERS WITH REPUBLIC
First music in 15 years. (10/14a)
RAINMAKERS 2020
Bring your umbrella.
GRAMMY OUTLIERS
Mulling possible surprises.
HALLOWEEN IN QUARANTINE
Why not wear a mask indoors?
ELECTION 2020
What drugs will help us get there?
 Email

 First Name

 Last Name

 Company

 Country
CAPTCHA code
Captcha: (type the characters above)