US reports music sales slump

US music sales slid by a tenth last year primarily because of online piracy and CD burning, according to the US music industry.

The Recording Industry Association of America (RIAA) said that US shipments fell 10.3 per cent to 968.58 million in 2001 from 1.08 billion in 2000.

The dollar value of all music product shipments dropped 4.1 per cent to $13.7bn (£9.7bn) in 2001 from $14.3bn (£10.1bn) in 2000.

"This past year was a difficult year in the recording industry, and there is no simple explanation for the decrease in sales," said Hilary Rosen, RIAA chief executive. She added that the economy was slow and that the events of 11 September had interrupted plans for the winter.

But Rosen pointed out that the industry "cannot ignore the impact on the marketplace" when 23 per cent of surveyed music consumers say they are not buying more music because they are downloading or copying it for free.

According to recent surveys for the RIAA conducted by Peter Hart Research Associates, of 2,225 music consumers between the ages of 12 and 54, 50 per cent said they did not buy more music in 2001 because they downloaded or copied most of it without paying.

Gartner analyst Paul-Jon McNealy explained that piracy and CD burning are definitely factors, but drew attention to the fact that music is a hit-driven business. "There may have been fewer hits in 2001 compared to 2000," he said.

The study found that ownership of CD burners has nearly tripled since 1999. In 2001 two in five music consumers owned a CD burner compared to just 14 per cent two years earlier.

Other findings showed that sales of full-length CDs dropped 6.4 per cent in 2001, which represented $12.9bn (£9.1bn) within the market and a 2.3 per cent decrease in dollar value from the previous year.

"Global piracy on the physical side costs the recording industry over $4bn a year. That doesn't even include losses online," said Rosen.