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CD industry lacks formula for success

Illegal copying, typically by young listeners, is blamed for worst music sales in a decade.

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Did you get a CD in your Christmas stocking this year? The recording industry sure hopes so.

But even if you purchased some of the 624.2 million CDs sold in the United States as of Dec. 22, record labels and retailers are not happy with you. Not happy at all.

Holiday numbers notwithstanding, the industry saw album sales drop at least 9 percent in 2002 - following a 2.5 percent drop the year before. These are the first years in which sales drops have been recorded since Soundscan began tracking in 1991.

The recording industry blames its falling sales on illegal CD copying, or "burning," and Internet swapping of digital music files known as MP3s. The music business hasn't seen a decline like this since blank cassette tapes became available in the '80s - an innovation that allegedly was going to cause its doom. The CD was seen as the industry's salvation - till the arrival of this latest copying technology.

Digital copying has certainly had an impact, say analysts like Geoff Mayfield, who oversees the charts at Billboard magazine. But other factors, from the weak economy to a dearth of good music, are definitely "contributing to the malaise that the industry felt this year," says Mr. Mayfield. He for one, sees another parallel with the 1980s besides the home-recording ogre: "We had a lousy economy in the early '80s, and we don't have a great one now."

But independent publicist Bob Merlis, a former Warner Bros. Records staffer, says "there's no doubt that [copying has had] a huge impact among a certain demographic." A friend of his who owns a record store in the college town of Eunice, La., reports that computer-savvy college kids are no longer buying CDs, a comment echoed by others.

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