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Appeared on: Thursday, May 25, 2000
Study finds Napster use may cut into record sales

"...A study released today by record industry retail tracker SoundScan shows declining CD sales at stores near universities, and some are pointing fingers at online music-swapping software such as Napster. The record industry has long warned that easy access to pirated music online would torpedo sales, despite industrywide figures showing a rise in CD sales in recent years.

SoundScan division VNU Marketing tested the theory by looking specifically at sales in stores near universities, where online music has been more widely adopted than in the general public. In those stores, SoundScan data shows that record sales have actually dropped 4 percent in the past two years. In stores near the 67 colleges that have banned Napster, citing an overload on their internal networks, sales have dropped 7 percent in two years.

Those numbers compare with an overall sales growth of about 20 percent across the music retailing industry.

"These figures should put to rest the ongoing debate about the effects of online file sharing," said Larry Miller, president of digital rights management Reciprocal's music division, which commissioned the study. "Record sales are up despite the widespread use of MP3, not because of it." It is unlikely that the fierce debates over the effects of MP3 and Napster will so easily be laid to rest, however..."



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