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California survey finds no harm from MP3 to CD sales
LOS ANGELES, June 22 (Reuters) - While University of Southern California was one of several colleges that recently banned students from using song-swap software Napster, it released a survey this week showing the technology has had little harm on the music industry or recording artists.

The USC survey, released this week, said use of Napster software, which allows fans to swap songs by trading MP3 files, a compression format that turns compact discs into small computer files, had not harmed CD sales among its students.

Surveys such as this are expected to be used in San Mateo, Calif.-based Napster Inc.'s defence in a copyright infringement suit filed against it by the Recording Industry Association of America (RIAA).

In recent months there has been much concern about piracy of recorded music on university campuses across the nation, but there has been little research on how students actually consume MP3s," said Mark Latonero, principal researcher of the study.

"The findings of this study contradict many media reports and music industry fears," he said.

The survey found 69 percent of all students surveyed said they had downloaded MP3 and 68 percent of those used Napster. It found MP3 usage among students had not significantly cut CD consumption patterns, with 63 percent of those downloading students saying they are still buying the same number of CDs and 10 percent of MP3 users saying they are buying more CDs.

Napster, which recently hired David Boies, one of the best known antitrust lawyers and a key figure in the Microsoft Corp. case, was not immediately available for comment.

The RIAA, which represents big record companies like Seagram Co. Ltd.'s Universal Music, Bertelsmann AG BMG, Sony Corp.'s Sony Music and Time Warner Inc.'s Warner Music Group, which is merging with EMI Group Plc EMI, filed suit against Napster in December alleging it is a haven for online music piracy.

On June 13, the RIAA and the National Music Publishers Association on June 13 filed a motion for a preliminary injunction against Napster. The case will be heard in U.S. District Court in San Francisco on July 26, with Napster due to file response papers on July 3 and the RIAA on July 13.

Napster's defence in the past has focused on the argument its merely a technology company and not responsible for what its users do online, much like Internet services providers.

Industry sources and a Wednesday interview with Boies on Inside.com, a media news Web site, indicates Napster is now changing its defence strategy to embrace the argument that personal sharing for noncommercial purposes is not a copyright infringement.

In the interview, Boies cited a landmark United States Supreme Court ruling in 1984 in Sony Corp. vs. Universal City which held that there was no infringement of copyrights when consumers used the Sony Betamax VCR to make their own personal copies of television programmes they were making a "fair use" of the copyrighted work.

"Napster seems to have a different legal strategy every day. They went from a defence with no basis in fact to a defence with no basis in law," Amy Weiss, senior vice president of communication for the RIAA, told Reuters on Thursday.

"Originally, they had a blind eye defence and said they didn't know what the users were doing. As of yesterday, they seem to have a brand new legal strategy and are saying wholesale piracy on an exponential level is legal, which is laughable," Weiss said.

In its motion, the RIAA cited a SoundScan study which found declines in CD sales near college campuses since 1997, despite an 18 percent overall increases in such sales nationwide.

In April, USC, Yale, and Indiana University were named in a separate lawsuit filed against Napster by the band Metallica, but the schools were dropped once they banned students from using Napster.




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