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From the RIAA:

June 25, 2003

Some Facts About Music Piracy


In the past three years, unit shipments of recorded music have fallen by 26 percent from 1.16 billion units in 1999 to 860 million units in 2002 in the United States (based on units shipped).

In terms of sales, revenues are down 14 percent, from $14.6 billion in 1999 to $12.6 billion last year (based on U.S. dollar value of shipments).

The music industry worldwide has gone from a $39 billion industry in 2000 down to a $32 billion industry in 2002 (based on U.S. dollar value of shipments).

Computer users illegally download more than 2.6 billion copyrighted files (mostly songs) every month. At any given moment, more than five million users are online offering an estimated one billion files for copying through various peer-to-peer networks.

As of July 2002, Kazaa boasted 100 million registered users. By May 2003, Kazaa had become the world’s most downloaded software, with 230.3 million downloads. In other words, Kazaa has been adding new users at a rate of 13 million a month, or 270 new members a minute.

Hit recordings have been impacted most dramatically. In 2000, the ten top-selling albums in the United States sold a total of 60 million units. In 2001, that number dropped to 40 million. Last year, it totaled just 34 million.

North American sales of blank CDs shot up by more than 30 percent in 2002 --outstripping sales of music CDs by a more than 2-to-1 margin. At the same time, sales of MP3 players jumped 56 percent. (International Recording Media Association)

About 25 percent of the total number of files available on unauthorized peer-to-peer services are hosted outside the United States. This is a particular problem in countries where broadband penetration is growing (especially Canada, Germany, UK, Sweden, Netherlands).

According to a November 2002 survey by Peter D. Hart Research, by a 2-to-1 margin, most consumers who say they are downloading more music report that they’re purchasing less.
The same survey found that the main reason teenagers aren’t buying more music is that they get a lot of what they want for free by downloading or copying it. Among 12- to 18-year-olds, 35 percent will download a new song they like vs. just 10 percent who will buy it. Among 19- to 24-year-olds, 32 percent download vs. 9 percent who will buy.

Releasing an album with major distribution costs a record label at least $1 million; of the thousands of new titles released each year by major labels, fewer than 10 percent are profitable.