As CD Sales Drop, Pirates Continue To Board Music Industy's Ship

CD sales have dropped 20% in the first three months of this year compared to the same period in 2006. And, digital sales, through outlets like Apple (AAPL) iTunes, are not making up the difference.

As The Wall Street Journal points out, music can be found online "in either legal or pirated forms."

BigChampagne LLC estimates that one billion songs are pirated and shared on file-sharing networks. The trend is helping to destroy the music retail industry.

Of course, Steve Jobs wants to eliminate the digital right management software that helps keep music from being stolen and shared among PCs and other devices.

It remains to be seen whether the music industry will do anything more than it does now to prevent piracy. The only avenue open to it may be the prosecution of individuals in the hope of scaring off those who illegally download songs.

But, that probably won’t work. The piracy phenomenon is too large.

There is a lesson in all this for the video industry. Maybe Viacom (VIA) is right. Sue ’em all.

Douglas A. McIntyre can be reached at [email protected]. He does not own securities in companies that he writes about.