Sales of CDs and video cassettes are continuing to fall and the entertainment industry is blaming Internet pirates for the slump.

The International Federation of the Phonographic Industry (IFPI) also said competition from DVDs and video games are to blame.

• CDs were down seven per cent compared to 2001
• singles, down 16 per cent
• cassettes, down 36 per cent
• video cassettes, down 42 per cent
• DVDs, up 58 per cent

The IFPI says the drop in CD sales was significant in the U.S., 10 per cent, because fans were swapping music files off the Internet.

The industry launched a campaign last year linking the downloading of music to theft. Stars including Eminem, the Dixie Chicks and Britney Spears appeared in commercials condemning the practice, calling people who do it "thieves."

"Widespread use of illegal sites, made easier with the growth of broadband access in major markets, is affecting (the) industry," said IFPI chair Jay Berman.

The Recording Industry Association of America (RIAA) filed lawsuits last week in New York, New Jersey and Michigan against four university students who run file-sharing music sites.

The Digital Media Association (DMA), a lobby group representing file-sharing music sites, says file-sharing helps music sales.

Technology consultant Bill Thompson says record companies are missing an opportunity.

"If the companies had given us a properly-priced, good quality music download service instead of trying to hold on to the CD market, we would all be happier now."