Recording Industry Sells More Music While Apple Sells More iPods

The New York Times reported that record sales increased in 2004, the first increase in some three years. The newspaper reported that the recording industry reported sales of some 667 million albums, a 1.6% increase over 2003. The increase sales in music came during a time when the recording industry said that piracy was decreasing sales, and while Apple registered its own impressive gains in sales of the iPod digital media device.

The recording industry

The Recording Industry Association of America (RIAA), the trade group for the major recording labels, has been crying foul over online music piracy for years.

While some critics pointed to problems in the industry like fewer albums being produced and homogenization of recording acts, the trade group decided its best option for combating piracy was to sue those it found to be stealing music. The RIAA began that campaign on April 4th of 2003, just three weeks before Apple launched the iTunes Music Store.

The group took some metaphorical black eyes for some of those suits and its tactics, but declared the first stages of its legal campaign a success (iTMS).

Apple & Co.

Itis likely no coincidence that the resurgence in music sales coincided with the rise in popularity of Appleis iPod. While Apple itself rung up the most legal online music downloads during 2004 through the iTMS, both the iTMS and the iPod brought increased attention to music itself. That is something the recording industry has largely failed to do for the last several years.

Until 2004, the last time the industry saw increased sales was when the original Napster exploded onto the scene. Napster was the vehicle for millions of pirated songs, but it also helped bring focus from many consumers onto the music market, and more than one study showed at the time that Napster users bought more CDs than non-users.

"Because Napster users are music enthusiasts, itis logical to believe that they are more likely to purchase now and increase their music spending in the future," Jupiter analyst Aram Sinnreich said in a statement in association to a study it released in July of 2000.

The RIAA successfully sued Napster, and had the service shut down. Almost immediately, music sales began a slow, three-year decline.

Whatever the case, the increase in sales for 2004 should bode well for Appleis music division.