Music Downloads Gain On CD Sales
So says research outfit NPD Group, which recently published a new report saying paid downloads accounted for 35 percent of music purchases in the U.S. during the first half of 2009 while CD sales made up 65 percent.
How much of a boost in download sales does that 35 percent represent? For comparison, NPD points out download sales in 2007 accounted for only 20 percent of total purchases.
In other words, online sales are gaining on CD sales, albeit slowly but surely. However, it doesn’t look as if CDs are going to become obsolete anytime soon.
“Many people are surprised that the CD is still the dominant music delivery format, given the attention to digital music and the shrinking retail footprint for physical products,” said Russ Crupnick, NPD’s VP of entertainment industry analysis. “But with digital music sales growing at 15 to 20 percent, and CDs falling by an equal proportion, digital music sales will nearly equal CD sales by the end of 2010.”
Although download sales have yet to overtake CD sales, NPD MusicWatch says when it comes to unit-sales volume of music sold at retail, Apple’s iTunes leads the pack with 25 percent of music units sold – up from 21 percent in 2008.
In second place is Walmart where the mega-retail chain’s physical stores combined with online ordering of CDs and the company’s music download service account for 14 percent of music volume sold. The same report places Best Buy in third place.
NPD also points out that, when it comes to downloads only, iTunes is still No. 1 with 69 percent of the market for the first half of 2009, followed by Amazon MP3 at 8 percent.
Furthermore, consumers still flock to Walmart for their physical CDs, giving the retailer a 20 percent chunk of the physical market, followed by Best Buy at 16 percent and Target and Amazon tied at 10 percent.
“The growth of legal digital music downloads, and Apple’s success in holding that market, has increased iTunes’ overall strength in the retail music category,” Crupnick said. “But the importance of the big box retailers shouldn’t be dismissed, as long as the majority of music consumers continue to buy CDs.”
Although the above numbers seem impressive and reflect the growth of download sales compared with physical sales, the report doesn’t compare sales against illicit downloads, CD ripping and general song-sharing. Despite all the available avenues for purchasing music – online AND offline, too much music is walking out the door in the form of unauthorized downloading and file-sharing as well as massive music / entertainment piracy in the forms of illegal CD / DVD reproduction and distribution.
Click here for the NPD Group Web site.