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Online CD Sales Fall; Analysts Blame Rise Of File-Swapping Sites; Services Offer Songs For Free; But other factors could be at play as well, such as lack of music trend, hot artists.(INTERNET & TECHNOLOGY)

Investor's Business Daily

| November 04, 2002 | COPYRIGHT 2002 Investor's Business Daily, Inc. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan.  All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)Copyright

Byline: PETE BARLAS

Online music sales have struck a sour note.

Sales of compact discs and tapes over the Web have dropped 25% this year, says a study to be released Monday. And the trend shows no sign of slowing.

Through the first nine months of the year, consumers spent $545 million to purchase music on the Web vs. $730 million a year ago, says comScore Media Metrix, a unit of researcher comScore Networks Inc.

The drop in online music sales runs counter to overall product sales on the Web. They're up 35%, says comScore.

The decline in music sales is puzzling and disturbing, says Peter Daboll, president of comScore Media Metrix. "When you see online sales in total growing pretty consistently at 30% growth year over year, to see one segment falling off is pretty surprising," he said.

The growth of file-sharing services are helping slow online music sales, says Daboll. Such services let consumers get songs over the Internet for free. "Consumers have a choice between clicking for purchase or getting something at a file-sharing site for free," he said.

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