CD Sales Growing Despite Internet Worries, RIAA Reports

'Unprecedented success' of young pop artists such as Britney Spears, Eminem driving market, report says.

The Napsters of the Internet world — and the free digital downloads they offer — may have a claim on the future, but the CD owns the present.

That's the bottom line according to midyear shipment data released by the Recording Industry Association of America as young pop artists such as Britney Spears, Eminem and *NSync continue to generate sensational album sales.

The number of full-length CDs manufacturers shipped to the U.S. market is at an all-time high. Sales have grown 6 percent from this time last year, totaling an impressive 420 million units in the first six months of 2000.

"Despite the excitement felt by music lovers and record companies alike over the positive potential of the Internet, for the time being, loyalty to the physical product remains, as is evident by these midyear shipment numbers," said Hilary Rosen, president and CEO of the RIAA. "CDs will be around for a long time."

During the past year, however, the record industry, in general, and the RIAA, in particular, have been quite vocal about the negative potential of the Internet with software services such as Napster supposedly threatening sales figures.

"It's not a surprise to us at all," said Stacey Herron, an analyst for leading Internet research firm Jupiter Communications. "We've been saying all along that Napster is a good thing for the industry. If nothing else, Napster gets people excited about music again, and [they] are getting turned on to new music. It'd be great if music executives could realize that it's only a benefit to them when audiences find out about new musicians and new genres of music."

The RIAA didn't specifically comment on the Napster debate, but spokesperson Amy Weiss maintained CDs "are a very strong format and will continue to be so."

The rise in sales, according to the report, is apparently being driven by the "unprecedented success" of young pop artists.

"Britney Spears, Eminem and *NSync sold millions of dollars in the last year," Weiss said. "But while these releases were such a phenomenal success, it doesn't necessarily reflect [negatively] on sales by other artists."

Eminem's latest release, The Marshall Mathers LP, sold nearly 2 million copies in its first week in May — the best first-week sales in the history of rap and second only to *NSync's No Strings Attached among all albums.

A week earlier, former Mouseketeer Spears' Oops! ...I Did It Again debuted with sales of 1.3 million, briefly making it the second-best first-week sales ever — after 14 weeks it still ranks in the #2 slot in Billboard's 200 albums chart.

The Marshall Mathers LP picked up the #3 Billboard slot this week, continuing to be propelled by the crossover smash single, "The Real Slim Shady." After 22 weeks, *NSync's album holds strong at the #6 position this week.

In other formats, cassettes are still being hailed as an "important part of the music market," according to the report, while barely making up 8 percent of all product shipped to manufacturers in the first two quarters and 5 percent of the overall market in terms of dollars. CDs make up 86 percent of the total music purchasing market.

"You need to keep in mind [that] cars now mostly have CD players, so that's a major factor in the decline in cassette sales," Weiss noted.

Shipments of singles in all formats, however, dropped sharply in the first half of 2000 and dropped close to 50 percent in the second half of 1999.

The report represents data compiled from companies that distribute about 90 percent of the prerecorded music in the United States.