HITS Daily Double
"These figures should put to rest the ongoing debate about the effects of online file sharing."
—Larry Miller, Reciprocal


Reciprocal Pins Sales Decline On Napster And Its Ilk
A press release issued today by Reciprocal announced that a study initiated by the digital-rights-management company has revealed "a steady two-year decline of college market album sales." But that's not all, folks. The release names the likely culprit—online file-sharing.

SoundScan-affiliated VNU Entertainment Marketing Solutions researched SoundScan-monitored sales in 9,000-plus record stores situated near more than 3,000 college campuses. The study showed a 4% decline in sales from two years ago, and a 7% decline at stores near the 67 schools that had banned Napster by late Feb.

"SoundScan is the authoritative source of this accurate data, and we asked them to perform the analysis," Reciprocal Music President Larry Miller stated with commensurate authority. "It is now clear that the controversial practices of companies that provide directories and an easy interface to libraries of unlicensed music are in fact detrimental to the growth of the music business and those artists whom they claim to support. Record sales are up despite the widespread use of MP3, not because of it. These figures should put to rest the ongoing debate about the effects of online file sharing."

Company President/CEO John Schwarz closed in for the kill: "Furthermore, other industries, including the publishing, motion picture and television industries, must take note of these figures. Unauthorized use of intellectual property is just as likely to hurt those industries, and they must act quickly to build a business in legitimate digital distribution."

Reciprocal undertook the study "to identify and measure the possible influence of music file sharing on retail sales" near campuses, and VNU came back with data that would seem to support Reciprocal's anticipated conclusion. But wait a minute—as a DRM company, Reciprocal is hardly objective on the file-sharing issue. Thus, while we can assume the accuracy of the research, Reciprocal's spun conclusion must come into question.

Some pro-file-sharing observers underline in particular the fact that the massive increase in Napster use over the past year should have been reflected in the timing and scale of the sales drop--but that in reality the decline was more gradual.

All of which begs the question: If file-sharing wasn't the cause of this sales decline, what else could it be? Is this damning evidence of MP3-trading's corrosion of the music business, or mere PR generated by a company that would benefit from such a conclusion? To borrow a phrase from the New Radicals' 1999 turntable hit, perhaps someday we'll know. In the meantime, we welcome your speculations, which you can send to us at [email protected].