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Software // Enterprise Applications

Song Trading Still Popular, Despite Lawsuits

The music industry says its lawsuits have slowed the tide of music downloads, but some analysts say users are just being more discreet.

PHILADELPHIA (AP) -- Greg Kullberg first started downloading free music off the Internet as a college freshman in 1996. He stopped--mostly--after the recording industry started filing lawsuits against file-sharers last year.

"Right away when I heard about it I actually went home and uninstalled my software," the 25-year-old Boston software consultant said. But like many users, he still downloads: "I'd say one song a week instead of before, it was maybe 20 a day."

The music industry, which filed suit against another 531 Internet users last week, says its tactics are slowing the tide of free downloads, citing cases like Kullberg's.

A study released in January that surveyed 1,358 Internet users in late fall found the number of Americans downloading music dropped by half from six months earlier, with 17 million fewer people doing it nationwide.

But some experts and users say that file sharers are only being more secretive, and that file swapping is actually increasing. At least two research firms say more than 150 million songs are being downloaded free every month.

The Recording Industry Association of America has sued 1,445 people since September, with the latest batch of 531 coming this month against people in Philadelphia, Atlanta, Orlando, Fla., and Trenton, N.J. Most of the earlier cases have been settled, for an average of $3,000 each.

"I think the RIAA's campaign is clearly and demonstrably having a tremendous effect, I'm just not sure to what end," said Eric Garland, chief executive of BigChampagne, an online media-tracking firm.

Graham Mudd, a researcher at comScore Networks, said the number of consumers visiting pay music sights like Apple's iTunes and Napster pales in comparison to the file-sharing sights like Kazaa. But he says the lawsuits are decreasing free downloads.

"The faucet is still absolutely on," he said. "I just think the flow may have been slightly limited."

Mitch Bainwol, the chairman and chief executive of the RIAA, said the record 2 million songs legally sold last week, mostly on iTunes and Napster, prove the lawsuits are educating users.

"There will always be piracy--there is on the physical side, there will be on the online side--but most people won't do it when they understand the legal consequences," Bainwol said.

The January study from comScore and the Pew Internet & American Life project found that 52 percent of 18- to 29-year-olds downloaded music last spring, but only 28 percent did after the lawsuits were filed.

Like Kullberg, others say their habits have changed.

Marissa Sinclair, a 22-year-old Philadelphia school teacher, said she and a half dozen friends stopped downloading because of the lawsuits.

Jeremy Spurr, 26, a financial planner in Boston, said the suits, which were filed only against people who share music, have stopped his friends from sharing songs with each other, but not downloading it for themselves.

Kullberg and Spurr both say the suits have driven file sharers to private servers or anonymizing services that mask Internet users' identities.

"I think people realize that, hey, if we're going to do this, we have to be quiet," Kullberg said.

BigChampagne's Garland said he thinks the January study--which did not measure computer use but surveyed users only about their habits--shows the lawsuits' biggest effect was educational: People now know file sharing is illegal so they lie about doing it.

"They have effectively put music downloading in the same stigmatized category as teen smoking," Garland said. "People know when they should be shy about an issue."

Garland said that while Apple hopes to sell 100 million 99-cent songs in one 12-month period, "10 billion, or more than 100 times that, will be downloaded in MP3 form for free."

Industry numbers can be confusing. The NPD Group found the number of songs downloaded increased from September 2003 to November 2003, when it was 166 million. Nielsen/NetRatings, though, found the number of unique users on Kazaa dropped by half to 7.3 million users in December 2003 from a year earlier.

Still, many point out, that's 7.3 million users compared with 1,445 lawsuits.

"No matter what they do, it's not going to work," Spurr said. "To me the lawsuits are useless because the Internet is about sharing."

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