RIAA MIDYEAR REPORT: INDUSTRY DOLDRUMS CONTINUE

OK, so it’s not "Man Bites Dog"—but hey, it’s a slow news week.

The RIAA issued its annual midyear report on CD shipments, which unsurprisingly detailed a 7% drop over the first six months of 2002, while the piracy data reveals that seizures of counterfeit product soared close to 70%.

CD sales generated $5.2 billion so far this year, compared to $5.5 billion during the same period last year; that’s a drop of 5.1% following a 5.3% sales drop last year from 2000, according to figures supplied by PricewaterhouseCoopers LLP.

Unit shipments of all product, including cassettes, vinyl LPs, CDs, cassette and vinyl singles, music videos and music DVDs, were off 10.1%, from 442.8 million over the first six months of 2001 to 398.1 million in a comparable period this year. Dollar value of all unit shipments was down 6.7%, from $5.9 billion in 2001 to $5.5 billion this year.

At midyear 2002, only 20 titles have sold more than a million units, compared to 37 titles last year.

In a survey of 860 Internet-connected music consumers aged 12-54 conducted by Peter D. Hart Research Associates, consumers say they are downloading more and purchasing less by a more than two-to-one margin.

* Among people who said their downloading from file-sharing services had increased, 41% report purchasing less music now than six months ago, compared to 19% who said they were purchasing more.

* For those who say they are downloading the same, 25% purchased less music, 13% more and 62% the same amount.

* For those downloading less, 22% said they purchased less in the last six months, 23% said they purchased more and 55% said they purchased the same amount.

* 35% of young Internet-connected music buyers say the first thing they will do after hearing a song they like by an unfamiliar artist is download the song for free from a file-sharing service.

* Only 10% say the first thing they do after hearing a song they like by an unfamiliar artist is buy the album.

* The RIAA Anti-Piracy Unit said arrests and indictments were up 83.9%, with executed search warrants up over 96%.

RIAA President Cary Sherman cited illegal downloading as the main culprit in sales drops. "This data should dispel any notion that illegal file-sharing helps the music industry. At least that’s what Hilary keeps telling me."