REPORT: ONLINE MUSIC HURTS CD SALES
Both online and physical music piracy continue to have a dramatic impact on the music industry, sending sales of compact discs down 7 percent during the first half of the year, a trade group said. The decline has cost the industry $284 million in lost sales, according to the Recording Industry Association of America. The survey also found seizures of counterfeit CDs soared by 69.9 percent. The decline, measured by PriceWaterhouseCoopers, compares with a 5.3 percent drop in CD shipments in the first half of 2001. The RIAA said the industry uses just-in-time delivery, so CD shipments are reliably indicative of actual sales. Also, the RIAA released a separate survey of Internet users' music habits, which found most consumers between the ages of 12 and 54 bought fewer CDs as they downloaded more tracks. Among people who said their downloading from file-sharing services had increased over the past 6 months, 41 percent reported purchasing less music now than 6 months ago, compared to only 19 percent who said they were purchasing more music. "Cumulatively, this data should dispel any notion that illegal file-sharing helps the music industry," said Cary Sherman, the RIAA's president.
MUSLIM SITE POSTS ALLEGED BIN LADEN LETTER
An Islamic Web site in Qatar has posted a copy of a letter it claims was written several weeks ago by Osama bin Laden. The Web site, islamonline.net, said the letter was obtained by its correspondent in Jalalabad, in eastern Afghanistan and it is similar to another note found previously by the CIA and FBI. The letter, written in Arabic, was not dated and no event was cited to suggest it had been written recently. The Saudi-born bin Laden is suspected by the Bush administration of masterminding the Sept. 11 terrorist attacks. Neither bin Laden nor his senior deputies has been seen or heard from since the U.S.-led air campaign on al Qaida bases began in Afghanistan last December.
AMAZON EXPANDS FREE SHIPPING
Amazon.com is expanding its free shipping offer for qualifying orders of as little as $25. The Seattle company described the move as a "new long-term test of customer response," set to run for 3-to-6 months. "There may be reasons to shop in the physical world. But price is not one of them," said Chairman Jeff Bezos. Along with price cuts on products instituted over the past year, Amazon has cut prices a total of five times in the past 13 months; threshold orders to quality for the free shipping offer have been cut twice.
BRITISH RETAILER PLANS DIGITAL MUSIC SALES
HMV Group is expected to announce a monthly digital music subscription service this week, the British Broadcasting Corp. reported. At a price of $7.59 a month, customers will be able to play a number of songs and download some as well. HMV will use technology and systems developed by On Demand Distribution, a British technology firm founded by musician Peter Gabriel. "This is a very important deal for the industry as a whole as HMV is one of the largest ... retailers of CDs and stocks quite a broad catalogue," OD2 Chief Executive Officer Charles Grimsdale told the BBC. Among the material that will be available is the entire Elvis Presley catalogue, as well as material from record labels such as EMI, Warner Music and BMG.
KPIG JOINS PAY TO PLAY SERVICE
After a month of silence, KPIG-FM of Watsonville, Calif., is back online but at a price. The station's live feed is available only through Real Networks' $5.95-a-month RealOne RadioPass service. KPIG, which launched its Web site, kpig.com, in August 1995, shut down its Internet broadcasts last month after the announcement of a set of royalty payments for Internet broadcasters and other digital-music broadcast services. Bill Goldsmith, a KPIG consultant, told the Washington Post: "It's become real obvious that there's no way to make money selling ads on Internet radio, but there's a big demand for commercial-free service. The only way that made sense was by selling subscriptions." RadioPass, real.com, offers 50 ad-free stations to subscribers.
HIGH SPEED INTERNET FOUND IN MORE U.S. HOMES
Nearly one in five American households now has some type of high speed Internet connection, according to a recent report. Nielsen's December 2001 figures show 21.2 million homes now have broadband connection, an 80 percent increase over the 11.7 million households reported in December 2000. The connection speed, the increased availability and affordability of the service, and the desire for home networking are some of the main reasons for this dramatic growth, the survey said. High speed Internet usage is expected to increase dramatically as access is opened to more areas and more phone line become "qualified" for this service. According to industry predictions, DSL usage is projected to increase 222 percent in the next year vs. 93 percent for cable modems.
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