Music piracy, long associated with peer-to-peer file-sharing networks, is a booming business offline.

Professional pirates have become more sophisticated and are costing the music industry $300 million dollars a year, according to the Recording Industry Association of America (RIAA), a trade group that represents the U.S. recording industry.

In a report released on Wednesday, the RIAA, cited 12 piracy ''hot spots'' -- Atlanta, Austin, Chicago, Dallas, Houston, Los Angeles, Miami, New York, Philadelphia, Providence, San Diego, and San Francisco -- where ''multi-state criminal operations'' are producing and selling bogus CDs.

The RIAA plans to work with law enforcement and deploy its own investigative resources in these cities in the coming year, said RIAA spokeswoman Jenni Engebretsen.

''With the problem as widespread as it is, we have to focus our resources,'' she said. ''So in these 12 cities we are making a commitment to step up investigative and training efforts with local law enforcement.''

The RIAA also intends to shift its efforts from pursuing individuals to stopping piracy at the source of the distribution chain where, according to the report, ''law enforcement can not only seize illegal goods but also shut down the means of production and thus have a far greater impact on the overall availability of pirate product.''

The RIAA claims that unauthorized compilations of popular music hits and counterfeit CDs with bonus tracks are increasingly being created and offered for sale.

Engebretsen said that these CDs are sometimes purchased by consumers who are unaware that the CDs contain pirated music.

Consumers were urged to avoid purchasing deeply discounted CDs, ''dream compilation'' CDs (songs by numerous artists who record on different record labels), CDs packaged in shoddy wrapping (misspelled words, blurry graphics), and to avoid purchasing CDs from places like flea markets or street corners.

It's no surprise that professional piracy is on the rise, said Mike McGuire, vice president or research at Gartner.

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