Digital Music Sales Up

CDs continue decline

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The decline in U.S. CD sales led to a decrease in overall music demand by 2 percent in the third quarter, according to the NPD Group.

The overall drop off in music purchases includes CDs, digital music downloads, and P2P file sharing sites.

The amount of U.S. Internet users, age 13 and older, purchasing a CD in the prior month fell from 25 percent in Q3 2007 to 22 percent this year. NPD estimates that the volume of CDs purchased fell by 19 percent in Q3 compared to last year. The most significant declines in CD sales were among teens (down 34%) and among adults age 26 to 35 (down 36%). CD purchases by adults age 36 and older were more moderate with a 10 percent decline.

Digital Music Sales Up

Digital downloads saw growth in the number of buyers, and the volume of songs sold in Q3. Fifteen percent of Internet users purchased music from online music stores, such as iTunes and AmazonMP3, which is an increase of 2 percent over last year and is about 2.8 million additional music -download customers. Legal music downloads were up 29 percent in Q3 with positive number for all age groups except those 50 and older.

"The continued growth in the customer base for paid digital downloads is positive, particularly for teens, but it’s counteracted by deepening softness in CD trends," said Russ Crupnick, entertainment industry analyst for NPD.

"Alternative distribution deals in mobile and social networking are important ways for the music industry to fill the gap left by the decline in traditional revenue streams."

The number of Internet users sharing music on P2P sites remained steady at 14 percent in Q3, but the volume of music shared via P2P sites increased by 23 percent, as P2P users reported downloading more files. Teens purchased 34 percent more digital downloads compared with last year.

"The industry has managed to constrain the number of people who are file sharing, but the expanded use of services such as Bit Torrent enable entrenched P2P users to download a growing number of files," said Crupnick.

Video gaming also has had a positive effect on the music industry. Twenty-two percent of music buyers and 35 percent of people under age 35 said they played a music-based video game, such as Rock Band or Guitar Hero, in the last three months. This has led to music gamers finding music and making digital or CD purchases.

"Even though gaming competes with music for the consumer’s entertainment wallet share, music-related games are evolving into an important source for music discovery that can have positive revenue implications for the recording industry," Crupnick said.

Digital Music Sales Up


Digital Music Sales Up
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  • http://www.leapingcatrecords.com Phil

    The fact is that most people, even within the music industry do not have any answers when asked how the industry will advance. Everybody is aware that something needs to change but what?
    Bands can now record such great quality demos, better quality than a lot of releases from the past and many Indie labels will market this music for a percentage. Really though, if the artist is taking care of everything includind medea supplies they only actually need exposure and a platform to sell for.
    Leaping Cat Records lead the way with this, hopefully other labels will see the way forward is not to pitch musicians against each other in unhealthy competition for a small slice of the action. The way forward is for musicians to work together, bands can sell CDs much cheaper if there is nobody taking a cut and why is there a need for anyone to take a cut?
    By now you are probably thinking “how can a record label earn money without taking a cut?” The simple fact is that there are other ways, it’s just a case of letting go of the old ideas and allowing yourself to be open to the new. Leaping Cat Records are to run a series of seminars for musicians and a seperate series for industry professionals where all will be revealed. How bands can promote each other while earning money for themselves and for their label. How the fruits of that mass promotion can, without compromise, be reaped by the musicians and how this also feeds the label.
    This isn’t a theory, it’s already a working model.

  • http://www.doggybehave.com/best_time_to_praise.php Sam Nichols

    The thing is everything will get replace from time to time, look at disc tape it only lasted for a few years, the life of CD has being a long one, i guess internet will be something to look at in the future for the music industry

  • http://www.loveisland.ro marius

    There surely wont be CD anymore, it will be all online sales, just look at the sales of disc men, if no one is buying disc men why are they buying CDs then

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