The International Federation of the Phonographic Industry released a report that states recorded music sales dropped 7.6% in 2003 from the sales level of the previous year. They point the finger of blame for the decline on illegal downloading of music. 

The final tally for music sales world wide came in at $32 billion for 2003. During the last year of the pop music boom (boyband’s, Britney’s and Eminem) of the late 90’s the industry recorded $38.5 billion in sales for 1999. 

While they blame illegal downloading for the current decline they also report that the legal download sector is growing. Online music sites in America sold over 19 million legal downloads in the last two quarters of 2003. 

This news comes just a little over a week after a study was released that says online piracy has little effect on music sales. 

The Harvard Business School released the results of a joint study they conducted with the University of North Carolina Chapel Hill that finds that "downloads have an effect on sales which is statistically indistinguishable from zero". 

The study debunked claims by the music industry against file-sharing. "Moreover, [the effect of file-sharing] is of moderate economic significance and is inconsistent with claims that file-sharing is the primary reason for the recent decline in music sales."

According to an MTV report, the study found that in the “worst-case scenario”, it takes “5,000 downloads to reduce sales of an album by one copy.” 

If you go by those numbers, then CD sales should have only dropped by 2 million from 2000 through 2002. MTV reports that CD sales actually dropped by 139 million copies. But what is really interesting in this study was the conclusion that “for the top 25 percent of best-selling albums, downloading went hand-in-hand with increased album sales.”

The study does tackle the issue of why music sales have declined. They point to a reduction in CD releases, less variety on radio, competition from other entertainment media and possible backlash against the RIAA’s anti-piracy tactic of suing file-sharers. 
 

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