We always knew they were lying; now we know how
This article explains a most interesting fact; year-on-year record sales are actually up by almost 10%, rather than falling by 7% as the RIAA claims.
The RIAA uses the -7% figure to "prove" that file sharing on the Internet is costing them money. However, the number amounts purely and simply to playing with accounting and inventory timing in order to manufacture a theoretical downturn. Basically, record stores are buying less stock forward, keeping fewer weeks of inventory on hand. This trend causes a blip in the order numbers. However, the blip certainly does not reflect a trend, as evidenced by the 10% rise--which is what the customer purchases--versus the theoretical 7% drop, which is what the music industry sells.
What is happening is that the retail points that sell CDs are getting better at managing their inventory. More inventory turns means better returns on assets and higher profitability.
Sure they are making things up; we expect businesses to lie to make their numbers look good. Enron, WorldCom, Shell, and now... the RIAA.