August 21, 2003 10:53 AM PDT

Are swappers scared of the RIAA?

The recording industry's legal efforts may be putting a dent in file swapping, according to a new report from The NPD Group.

The report, released Thursday, said online file swapping started dropping in May, shortly after the Recording Industry Association of America (RIAA) publicly hinted that it may go after individual file swappers. The number of households acquiring music fell from a high of 14.5 million in April to 12.7 million in May and 10.4 million in June, according to NPD.

NPD defined music acquisition as obtaining songs through paid sites, ripping CDs and file swapping sites. Of the three categories, file swapping accounted for about two-thirds of all music acquired during the three months. The company said it would break out more detailed statistics for the different categories in future studies.

In April, two federal judges issued rulings that laid the groundwork for the RIAA to pursue individual swappers. First, a judge ordered Verizon Communications to identify a subscriber whom it suspected of trading massive amounts of copyrighted files. Then, another judge ruled that the makers of Grokster and Morpheus weren't liable for copyright infringement, all but ensuring that the labels would go after individual traders instead.

Although NPD said it couldn't make a direct link between the sharp drop in file swapping in May and the RIAA's legal battles, the connection seemed more than coincidental.

"While we can't say categorically that the RIAA's legal efforts are the sole cause for the reduction in file acquisition, it appears to be more than just a natural seasonal decline," Russ Crupnick, a vice president at NPD, said in a statement. "This decrease is sharper than the declines we're seeing in the offline retail world."

However, summer is traditionally a slow time for file swapping because many students are away from the fast connections on their college campuses that allow them to trade vast amounts of files.

The RIAA didn't begin its public campaign to sue file swappers until late June, when it announced that it would start gathering evidence to identify people who have traded illegal files. Since then, the group has sent out hundreds of subpoenas to file traders from all walks of life.

Recently, however, the RIAA seems to have curbed some of its efforts amid bad publicity and questions from federal lawmakers about the issue. Now the group is saying it will only go after people who trade a "substantial" amount of music.

 

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