PHOTO GALLERY Steven Tyler of Aerosmith. The album most searched-for last week on the Internet was Aerosmith's 'Honkin' on Bobo'. (AP photo)

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Same old tune: Blame downloads: Bright spots seen in wired world, but CD sales drop 7.6 percent
By Jon Chesto
Thursday, April 8, 2004

Industry executives blamed illegal file-sharing and competition from other forms of entertainment yesterday for a 7.6 percent worldwide drop in music sales last year and a 6 percent slide in the United States.
     Duncan Browne, chief operating officer at Newbury Comics in Brighton, said there's no question file-sharing ate into sales at his chain's 24 music shops. But he said the industry's well-publicized lawsuits against downloaders helped deter many digital thefts by the time the year ended.
     ``I think the lawsuits have had some impact,'' Browne said. ``At the end of the year, more people were like, `That is illegal and maybe I shouldn't do it.' ''
     Browne said Newbury Comics' compact disc sales fell by about 9 percent last year, with an improvement at the end of the year.
     Still, Browne sees a decent year ahead. He said Newbury Comics' first quarter was its best in a few years for music sales, with the volume of sales up 3 percent and the total revenue from the units holding steady. Help came from singer Norah Jones, with her blockbuster sophomore album's release in February, and the attention around the Grammys awards show.
     Yesterday's global figures - as calculated by an international music trade group, IFPI - show a similar trend.
     Sales fell by 12 percent in the first half of the year for the country but rebounded in the second half with the help of strong-selling CDs from OutKast, Alicia Keys and other artists, IFPI said.
     Retail music sales - which include concert DVDs and tapes but not legitimate online sales - fell in this country to $11.8 billion in 2003 from $12.6 billion in 2002. Total global sales, meanwhile, fell to $32 billion from $34.6 billion in the fourth straight year of declines.
     Last year's IFPI survey, however, didn't count legitimate online music sales, which started to gain steam in 2003 with the launch of Apple's iTunes.
     Felix Oberholzer-Gee, a Harvard University professor, said he doubts much of the loss was due to online piracy.
     Oberholzer-Gee, co-author of a report released last week with a University of North Carolina professor, said he studied sales of 680 albums in the fall of 2002 and found no statistical link to spikes in downloading songs from those discs and drops in sales.
     David Card, an analyst at Jupiter Research in New York, said the end to a ``CD upgrade cycle'' is a larger culprit. During the 1990s, music lovers bought piles of CDs even though they already had the albums on record.
     ``The market was abnormally inflated for a while as everyone bought everything they owned already for the second time around,'' Card said.
     But Josh Bernoff, an analyst at Forrester Research in Cambridge, said his firm estimates illegal downloads wiped about $700 million from total music sales last year in this country alone.
     

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