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I know they are referencing lost revenue, but what I'm trying to get at is that they inflate numbers based on worldwide piracy and use it to try and influence law makers in the US. For example trying to exert pressure on ISPs to block people etc.
If 95% of music sold in America was pirated, then music would not exist in this country as there would be no way to make a profit of it.

No one is claiming that %95 of the music sold is pirated.

Pirated music is very rarely sold-- its "shared". You can argue that sites like Rapidshare are, in effect, selling access to a stock of pirated material . . . but since these are all offshore private companies, we have no idea what their revenues are. Looking at the bandwidth they eat up, they must be very large in deed (Rapidshare has been, according to Alexa, as much as %4 of total Internet traffic!, and if you add up all the "share" sites, it looks to be at least %10 of all traffic)

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If 95% of music sold in America was pirated, then music would not exist in this country as there would be no way to make a profit of it.

Sales for the music industry are dismal. Any number of bands will tell you that piracy has destroyed their record sales, and they're quite right. If you look at sales figures, its clear that unless people mysteriously stopped listening to music, they're getting their music without paying for it.

Its also notable that in segments of the record business where piracy is hard (vinyl) or doesn't match the demographic (country/urban/classical), sales remain pretty good. Any band that appeals to a technically literate user with a broadband connection and internet savvy pretty quickly finds their stuff is pirated, often before its released  . . . and it has a very obvious effect on sales.