Online Swapping Crippling CD Sales

Even after the dissolution of Napster, consumers continue to turn to online swapping as means of acquiring new music, and the recording industry is suffering.

Compact disc music sales decreased 7 percent during the first half of the year, a further indication that online music sharing sites are hurting the recording industry, a trade group said.

The decline cost the industry $284 million in lost sales, the Recording Industry Association of America said Monday.

The decline, measured by PricewaterhouseCoopers, compares with a 5.3 percent drop in CD shipments in the first half of 2001. The RIAA said the industry uses just-in-time delivery, so CD shipments are reliably indicative of actual sales.

Also Monday, the RIAA released a separate survey of Internet users' music habits, which found that most consumers between 12 and 54 bought fewer CDs as they downloaded more tracks.

Previous studies independent of the music industry have suggested that access to free music on the Web encourages consumers to experiment with new acts and buy more CDs.

"We find a striking connection between people who say they are downloading more and buying less," said Geoff Garin, pollster for Peter D. Hart Research Associates, which conducted the random telephone survey of 860 consumers for the RIAA in May. The survey has a margin of error of plus or minus 3.4 percentage points.

Of consumers polled whose downloading increased during the last six months, 41 percent reported buying less music, compared with 19 percent who said they were purchasing more, he said.

Among those polled who said they were downloading the same amount as six months earlier, 25 percent said they purchased less music, compared with 13 percent who bought more, Garin said.