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Holiday Music Downloads Set Records

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The week between Christmas and New Years Day saw 20 million songs downloaded, more than doubling the record set the week before Christmas, according Nielsen SoundScan and E-Commerce Times.

For the year, digital downloads surpassed 350 million, an increase of 147 percent over 2004. The spike is attributed to a 7 percent drop in CD sales, a rush on MP3 players like Apple’s iPod, and music download gift cards. Around half a billion dollars worth of MP3 players were sold in the month prior to Christmas.

The future of the physical CDs continues to come into question as digital seems on its path to replacing them altogether. The drop in CD sales combined with 250 million swapped songs in peer-to-peer networks last year has music labels crying foul, insisting that the 99 cent-per-song price at Apple’s iTunes Music Store is too low.

Few people may empathize with the music labels, however, knowing their long history of nickel-and-diming music artists, gouging the music-listening public by a failure to make good on lower CD prices though cheaper to produce than cassettes, creating cookie-cutter fake bands for every new generation of teenagers, and the fact that digital production and distribution costs substantially less than CDs which cost around $1 per song as it is.

Oops, this report just turned editorial. My apologies.

Apple’s Steve Jobs, however, has remained adamant about the iTunes per-song price, however, predicting that if prices were higher then music lovers would be driven back toward piracy.

After the Supreme Court ruling came down against file-sharing network Grokster last summer, the number of households illegally downloading songs dropped 11 percent between June and October.

Holiday Music Downloads Set Records
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