RIAA Report Strikes A Positive Note

Ending four successive years of decline, the number of overall units of music formats shipped to retail distribution channels increased by 4.4 percent year-over-year in 2004--representing a 3.3 percent increase in retail value compared to 2003, reported the Recording Industry Association of America yesterday.

But the number of overall units shipped to retail channels in 2004 is still down 21 percent compared to year-end numbers five years ago, the RIAA said.

The association cited research by Nielsen SoundScan, which found that the top 100 albums--"often the most heavily pirated," according to the release--sold 146.8 million units in 2003, compared to 153.3 million units in 2004. But the top 100 albums sold 194.9 million units in 1999.

"There was some encouraging progress last year," Mitch Bainwol, chairman and CEO of the RIAA, said in a statement. "The public's excitement for new music formats, coupled with the music community's enthusiasm for distributing its content in new ways, have been a real spur to innovation for our industry."

Bainwol and the RIAA continue to express great concern over illegal downloading and uploading of copyrighted content, but increasingly entwine such concerns with a thread of optimism: "Consumers also increasingly embrace legal digital music formats, with the popularity and traction of online music services continuing to expand," stated the RIAA report, explaining that nearly 140 million licensed digital tracks were sold in the United States in 2004.

Jupiter Research analyst David Card, who has followed the health of the music industry for some time, attempted to put things in perspective: "There's no doubt it was a good year, but it wasn't 1999, nor are we going to see those numbers again any time soon." The industry's salad years in the late '90s were "abnormally" healthy, Card added, because--among other factors--Baby Boomers were transferring their music libraries to CD.

The 2004 statistics used by the RIAA were supplied by PricewaterhouseCoopers.

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