Blaming piracy for a continued slouch in sales, the recording industry has stepped up its mutual drive with law enforcement to quash commercial copyright infringement.
A report by the Recording Industry Association of America Inc. Monday blames online and physical piracy for dipping sales and gives a new glimpse into the group's drive against physical CD piracy.
The numbers come at an auspicious time, as Congress begins considering a controversial bill to stem illegal peer-to-peer file trading. Also, the U.S. Federal Communications Commission is beginning discussions of how to protect digital television content.
"Cumulatively, this data should dispel any notion that illegal file sharing helps the music industry," said RIAA President Cary Sherman in a statement. Sherman said online piracy was the main cause of a 7 percent dip in CD shipments this year, a loss of US$284 million at the suggested list price.
The RIAA paired its data with a May survey by Peter D. Hart Research Associates, which reports that people who are downloading more than they did six months ago also are purchasing less music.
Graham Spencer, a cofounder of fair-use advocacy group DigitalConsumer, is skeptical.
"There's a new study every week," Spencer says. "Half of them say that file sharing hurts the music industry, half of them say it helps it."
"I'm not sure that these kinds of studies should be used for driving policy," he adds.
Spencer references a Forrester Research Inc. study from earlier in August that suggests digital downloads aren't hurting the music industry. The biggest downloaders tend to be music fans who will purchase CDs anyway and will only decrease their purchases by 2 percent in the next year, Forrester contends. The study says falling CD sales have more to do with a down economy, cannibalization from other media, and a lack of diversity in radio playlists.
The Hart study surveyed 860 music consumers ages 12 to 54 who had ready Internet access to music--about 66 percent of the Americans in that age bracket. The study finds 24 percent of these wired users say they copied 11 or more CDs this year, compared with only 10 percent in 2001.
Mike Godwin, a policy fellow with the Center for Democracy and Technology, says it's difficult to assess the RIAA study's validity and significance without being able to read it in its entirety.
The RIAA declines to release the full study, calling the information proprietary.
Fighting CD Piracy
Meanwhile, data issued by the RIAA reveals the organization's bolstered push against illegal copying of physical CDs.
The RIAA says the number of arrests and indictments with which it assisted soared 84 percent during the first half of 2002, to 2305 cases. Similarly, it says it aided 350 search warrants and consent searches, an increase of 97 percent.
The number of pirated CDs has skyrocketed in part because of they are easily copied, and because of increasing illicit CD sales at flea markets and by small-time vendors, the RIAA says. The organization claims piracy costs its members $1 million each day.
In response, the group marshals a squad of full-time investigators and lawyers, who package piracy cases and hand them over to law enforcement agents.
"We try to do as much of the up-front investigation as we can," says Frank Creighton, RIAA executive vice president, who heads up the group's efforts. His team provides training, expert testimony, victim impact statements, and even evidence-storage fees to help law enforcement officials. "In essence we are there to hold their hand through the entire process," Creighton says.
Most cases are prosecuted at the state level, where anti-piracy statues require fewer resources to enforce, Creighton says. The RIAA plans to expand its network of tipsters through the CrimeStoppers program, which offers hundreds to thousands of dollars for successful leads.
The government is mulling ways to protect digital content, from music recordings to digital movies. Hearings are expected in September on the peer-to-peer piracy bill. In July, lawmakers urged Attorney General John Ashcroft to boost prosecutions against copyright infringement over these networks.
A bill that would require digital copy protection is still in the Senate Commerce Committee, chaired by author Senator Ernest Hollings (D-South Carolina).
Consumer groups are also getting ready for the hearings, to testify as consumer advocates and try to preserve fair use policies.
"I think it's definitely the case that the recording industry is concerned with what it sees as an increase in piracy worldwide and...government has been increasingly responsive to that concern," says CDT's Godwin.