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Recorded Music Sales Down 10 Pecent in First Half of 2003

(CelebrityAccess News Service) — Shipments of music products to retail outlets declined nearly 10 percent in the first half of 2003, representing a nine percent drop in dollar value compared with the first six months of 2002, according to statistics released by the Recording Industry Association of America (RIAA). The RIAA attributed the decrease, in large part, to music piracy on peer-to-peer networks and illegal CD copying.

"While there are other factors contributing to the decline of music shipments in 2003, including the fact that there are significantly fewer music retail locations, illegal file 'sharing' continues to adversely impact the sale of physical CDs," says Cary Sherman, president of the RIAA. "We believe the use of these illegal peer-to-peer services is hurting the music industry's efforts to distribute music online in the way consumers demand."

In response to the growing levels of piracy affecting the recording industry, and as part of its larger, multi-year efforts to fight music theft, the RIAA recently announced that it would begin gathering evidence and preparing lawsuits against individual computer users who are illegally offering to "share" substantial amounts of copyrighted music over peer-to- peer networks.

The RIAA states that "the music industry has worked to educate the public about the illegality of unauthorized music distribution on these networks; additionally, major music companies have continued to make vast catalogues of music available to dozens of online music services to help create legitimate, high quality and inexpensive alternatives to Internet piracy."

"The number of ways fans can get music online in legal, consumer-friendly and high-quality sites is growing each week," adds Sherman. "In addition, we look forward to exciting releases from new and established artists in the second half of the year."

According to PricewaterhouseCoopers LLP, CD shipments to retail markets decreased nearly 10 percent in the first six months of 2003. A marked decline in direct and special market sales led to a 15.3 percent drop in total CD shipments, which includes shipments to retail and direct and special markets in the first six months of 2003. The first-half decline in CD shipments follows last year's seven percent drop in overall CD shipments.

All music format shipments (total U.S. music shipments), including to direct and special markets, dropped 15.8 percent from 398.5 million units (first half of 2002) to 335.6 million units (first half of 2003). In dollar value, this represents a 12 percent decrease, from $5.5 billion to $4.8 billion. by Bob Grossweiner and Jane Cohen