FLATTER NOTES FORECAST MUSIC REPORT PREDICTS NO RECOVERY TILL 2005.

Byline: Greg Hernandez Staff Writer

The beleaguered music industry will continue to suffer a decline in sales next year with a rebound not expected until 2005 at the earliest, according to a report released Tuesday by Informa Media Group.

The London-based research firm estimates that the industry's global value will dip below $30 billion in 2004 then return to growth provided that industry-backed subscription download services take off.

The industry is attempting to stem a 31-percent slide in music sales over the past three years, a downward spiral it blames largely on Internet piracy.

Simon Dyson, author of the report ``Global Music Industry: Facts and Forecasts,'' believes the major music labels have not acted decisively enough to stem the rise of digital piracy and now find themselves in an unfavorable position.

``The current decline in music sales is by no means irreversible,'' Dyson said. ``But urgent action is needed to limit the downloading and copying of music. This does not just apply to the music companies but to all those involved in the process.''

In September, the Recording Industry Association of America took the dramatic step of suing more than 250 Internet users tagged as major offenders for illegally downloading and distributing more than 1,000 songs.

Dyson expects a reduction in illegal online file swapping and greater control over CD copying to help reverse the decline and predicts that the value of global sales will rise to $32.5 billion by the end of 2007.

The Informa report also states that the significance of music sales via the Internet has been exaggerated as a long-term solution for the industry and also states that digital music sales will remain a niche factor.

Still, some industry experts said Tuesday that some of the projections in the Informa report might be overly optimistic.

``I deal with kids every day, 18 to 20 years old, and they are not interested in paying for downloads. They are happy getting it for free,'' said Ken Cmar, a music professor at the New England Institute of Art. ``They don't think anything bad will happen to them, knowing full well it's illegal.''

Cmar, who is president of Wonderdrug Records in Boston, doesn't think lower prices or added value will be able to stop the sales slide either.

``A lot of kids will say if CDs were $10 or less they would still buy them, but talk to a 14-year-old and they have no concept of buying a CD,'' Cmar said. ``Owning the physical product means nothing to them.''

Joel Leach, head of music industry studies at California State University, Northridge, believes that although the music industry is dramatically changing, it will survive - if the past is any indication.

``The best we can do is look at history,'' Leach said. ``We faced much the same thing with invention of the record player and the coming of radio. Both times the fear was that we were going to lose control of our creative properties, and both of those proved to be wrong.''

He added, ``We can only hope that technology cannot only be used against the industry, but also used to help it.''

Greg Hernandez, [phone]

greg.hernandez(at)dailynews.com