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"In 2001 more people listened to more music than ever before," says Jay Berman, chairman of the I.F.P.I. "We just weren't getting paid for it." In other words, the party reconvened at a free establishment down the street. That place is not Napster or any one of the dozens of free online music-file-swapping services like Morpheus that sprang up after the Big Music labels had Napster shut down by the courts. That place is your home.
Consumers, it seems, can't get enough of ripping (that is, copying a CD to their computer's hard drive) and burning (creating a new CD from scratch). In the U.S., last year saw a whopping 90% rise in the number of owners of computers with a drive that burns CDs (called a CD-RW drive, short for recordable/writable). A third of all PCs have one; 54% of new computers come with one installed. Half of CD-burner owners, reports Forrester Research, create at least one disc a month. Blank CD-Rs (discs on which you can record only once) bought in bulk cost as little as 25[cents] each. Making your own CDs--from your collection, from friends' discs or from downloaded tunes--is easier, cheaper, faster and more satisfying than any '80s mix tape ever was. Millions of music lovers who don't (yet) own a CD burner are enjoying often eccentric collections of tunes created by friends and colleagues.
This trend has Big Music running scared, at a speed that makes its fight against Napster look like a stroll through the easy-listening section of Sam Goody. Hilary Rosen, the tough-talking president of the Recording Industry Association of America (R.I.A.A.) who led the legal charge against Napster, feels almost nostalgic about 2000, when file sharing was the sole problem. After all, only 11% of Napster users ever transferred their stash of tunes onto a CD; the rest kept them on a computer. Since piracy has gone portable--and local--it is perceived as more of a threat. "It used to matter whether there was some bad guy in a Chinese manufacturing plant sending out thousands of counterfeit copies," says Rosen. "Now people at home can have the same impact."
Case in point: Linkin Park's Hybrid Theory, the biggest-selling album of 2001. About 4.8 million people bought it, and the same number, it is estimated, got hold of it free--either from a friend or online--and burned it themselves.
The scale of the home-burning business, however, does not by itself prove that sales are being leached away. A report released last month from research giant Jupiter Media Metrix says the picture is more complex: many burners buy more recorded CDs than they used to. After all, if you really love listening to an album, you're going to want the real thing--lyrics, liner notes and all. Chances are it is the so-so albums--the ones from which you want only one or two tracks--that are suffering.
The Big Five labels are taking no chances. They are pressing ahead with the technology they feel is best placed to combat piracy in the short term--copy-protected CDs, which have built-in encryption that is supposed to prevent you from copying the tunes more than a set number of times (usually once, which is the labels' nod to the concept of "fair use" copying in copyright law). "Our goal is a level of protection that will keep honest people honest," says Paul Vidich, an executive vice president of Warner Music (like TIME, part of AOL Time Warner).