The industry released the figures after a federal court ruled this month that the service helped users to violate music copyright laws. Financial penalties and an injunction have placed the future of the popular service in question. We haven't seen a credible survey yet that suggests Napster is hurting CD sales. Last week, music executives shook off Napster's offer to settle a copyright infringement lawsuit, saying it didn't offer a viable business model and failed to address concerns over the security of online music. The money would come from a fee-based service that Napster would like to launch if given approval from the record companies to use their songs.
Some experts trace the drop in the sale of singles back to the record companies themselves.
Industry watchers say that record companies have cut production of an unprofitable product that no longer serves the needs of the industry. Singles, a mainstay of the industry in the 1950s and 60s, have fallen out of favor as a tool to inflate sales figures and influence radio programming, said Roy Lott, president of EMI Group's Capitol label. Industry analysts said the drop in sales can be attributed to a number of factors, including economic factors and a weak year for music releases. It's a combination of things. Softness in consumer spending.