COMPARING SALES COMPARING SALES How music sales compare, year-to-date as of June 4 (in millions of albums or equivalent): 2005 2006 Change Digital sales 13.4 23.7 77% Album sales 238.6 231.7 3% Sources: RIAA, Nielsen SoundScan RIAA chief says illegal song-sharing 'contained' LOS ANGELES  Nearly a year after the Supreme Court issued a landmark ruling against online music file-sharing services, the CEO of the Recording Industry Association of America says unauthorized song swapping has been "contained." "The problem has not been eliminated," says association CEO Mitch Bainwol. "But we believe digital downloads have emerged into a growing, thriving business, and file-trading is flat." That's an optimistic view from an industry that saw its numbers slide to near oblivion after the launch of the original Napster in 1999. CD sales fell as much as 30%, and the RIAA pressed Congress and the courts for relief against what it said was rampant piracy. After the Supreme Court ruled that the services could be liable for piracy by their users, the RIAA sent cease-and-desist letters to several firms. Most — including BearShare, WinMX and Grokster — shut down. EDonkey and others said they would switch to a licensed, paid model. EDonkey, which along with BitTorrent is one of the most-used file-sharing services, has yet to make the switch. Even with Grokster and WinMX shut down, their software programs still exist. Eric Garland, CEO of Internet measurement firm BigChampagne, says that more people than ever are using file-sharing networks. "Nearly 10 million people are online, swapping media, at any given time," he says. That May figure is up from 8.7 million people in 2005, he says. Garland says the RIAA has made some inroads. "They have removed the profiteers from online piracy," he says. "They've also embarked on a very successful education campaign. Kids now know about copyright, and the consequences." The RIAA has sued just over 18,000 individuals for sharing songs online, with 4,500 settling for about $4,000 per case. Album sales are still down — about 3% this year. But Bainwol says digital sales — up 77% — make up for the shortfall. The wide availability of legitimate alternatives to file-sharing services has helped wean computer users away, says Russ Crupnick, president of the music group for market tracker NPD Group. Apple's iTunes has sold more than 1 billion songs to consumers, and online stores Rhapsody and Napster are gaining traction. Crupnick says digital store purchases have "almost doubled" while file-sharing is flat among computer users in 12,000 homes in an NPD survey. Meanwhile, the RIAA is suing XM Satellite Radio, which introduced a portable $399 player (from Pioneer and Samsung) that lets subscribers record songs. Bainwol says he doesn't mind consumers acquiring songs on the device — it's just that XM hasn't licensed the songs for download. "We love the technology and think it's cool, but if you want to be an iTunes clone, you should pay for it," he says. XM has called the RIAA lawsuit a "negotiating" tactic. About 1.5 billion songs are available for free swapping at any given time on file-sharing networks, says Garland, a mix of current hits and songs from such artists as the Beatles and Led Zeppelin that have yet to be released to the digital music stores. That number is huge but hasn't grown substantially, while video piracy has. "The music industry isn't seeing double-digit growth in piracy anymore, but Hollywood is," Garland says.