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MID-YEAR SHIPMENT DATA
SHOWS 5.8% DECLINE
RIAA Report Says Legit Download Sales
Help Some, But Piracy Still Hurts
New data released by the RIAA today indicates that shipments of recorded music in all physical formats declined by 5.8% in the first half of 2005, compared to the same period a year ago, with shipments of CDs dipping by 6.5%.

In a press release detailing the data, the RIAA says the music industry “continues to be impacted by illegal online downloading, rampant unauthorized CD burning and traditional counterfeiting of physical products,” calling the three forms of piracy the “primary culprits” in the industry’s continuing slide.

One bright spot, though still not bright enough to turn things around, is that legal digital sales of singles grew by 154% in the first half, compared to the first half of 2004. In the first six months of this year, 148.7 million digital singles were paid for and downloaded, versus 58.6 million in the first half of 2004. Also, 5.1 million full-length albums were legally downloaded in the first half of this year, compared to 1.5 million albums during the same period last year.

The RIAA, using current prices of $0.99 per single and $9.99 per album, estimates the total value of singles and albums downloaded legitimately in the first half at $198 million, compared to $73 million in the first half 2004.

By combining first-half shipments of all physical products with digital download sales (by counting both physical and digital singles as 1/12 or an album), the RIAA arrived at a total first-half album unit count of 343.9 million, which represents a 2.4% decline over the year-earlier figure.

So there’s your good news. Meanwhile, as the RIAA’s war against piracy continues, the trade organization cites NPD Group analysis saying that burned CDs accounted for 29% of music obtained by listeners in 2004 and that 17% of households with Internet access and CD burners are burning more than 10 CDs a month.

“Even as we continue to transform ourselves and transition to the digital marketplace, the music community is still suffering enormously from the impact of various forms of music theft,” said RIAA Chairman/CEO Mitch Bainwol. “One of the stories we need to repeatedly tell in the coming months is that illegal downloading and burning continue to compromise the industry’s ability to invest in the new bands of tomorrow.” That sounded a lot like, “Stop taking our stuff or we won’t make any more,” but maybe we’re reading too much into it.

Looking on the bright side, however, Bainwol said, “In a relatively short amount of time, this industry has revolutionized itself and the way it does business. We are responding to consumers, working with our partners in various technology industries, and delivering some of the best music ever to our fans. Did I say ‘our fans’? What I meant was, ‘music fans.’ The RIAA doesn’t really have fans—other than maybe the army of lawyers who get to bill heck out of us for helping sue the pants off all those thieving college kids.”
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