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CD shipments surge after lean years

Record industry says gains aren't enough to eliminate its fears of P2P technology.

CD shipments are surging this year, but not enough to erase previous years' declines in the music business, according to the Recording Industry Association of America.

The record industry's trade group said the value of shipments of all music at the midpoint of 2004 had climbed nearly 4 percent compared to the previous year. The industry has shipped 10 percent more CDs to retail outlets than last year, showing a strong increase in demand.

But that growth does not mean that the industry can let up in its years-long legal attacks on file swapping and other digital copying, executives said.

"We are rising out of a deep hole and still have a long way to go," RIAA Chief Executive Mitch Bainwol said. "Piracy, both online and on the street, continues to hit the music community hard, and thousands have lost their jobs because of it."

The statistics are likely fuel new rounds of speculation about the effect of Internet swapping--and new digital download sales--on the music business.

The music industry's balance sheets have been hard hit over the past four years, with steep, consecutive year-over-year declines in sales. The trends have led to widespread layoffs, consolidation and shrinking budgets for development of new acts.

Record company executives have placed much of the blame at the feet of Napster, Kazaa and other file-swapping networks, through which people have downloaded billions of MP3s without paying for them.

Some studies have said these networks have had little actual effect on sales, however. Record industry critics have noted that the economic recession, as well as growing competition for home entertainment budgets from DVDs and video games, likely helped contribute to the falling music sales.

What does seem to be evident in the RIAA's midyear figures are changing patterns in music consumption, however. Some analysts have predicted that file trading could lead people to sample albums more frequently before buying, diverting some sales from the heavily marketed superstars to lesser-known acts.

The RIAA said top-selling albums--often the most widely available on file-trading networks--are still selling relatively fewer units than at the peak of 2001.

The top 50 albums shipped 16.7 percent fewer copies than in 2001, and the top 100 albums shipped 19.7 percent less than in that top year, the group's figures showed.

The RIAA's figures also reported sales of nearly 59 million digital singles from outlets such as Apple Computer's iTunes during the first six months of 2004.