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Study: Music industry on the mend, CD buyers increase

Posted at 08 March 2012 20:22 CET by Justin_Massoud

Sales of music CDs have fallen precipitously over the past decade. Pushed to the brink by online file-sharing, piracy and, one may argue, a matching drop-off in quality artists, even customers who wanted to continue buying CDs found their efforts thwarted: record stores around the U.S. closed as their cash registers dried up.

The NPD Group claims the tide is turning, with growth reported within both physical and digital sectors last year.

According to NPD, the number of consumers buying CDs topped 78 million last year, marking a two percent increase over 2010 and the second consecutive year of growth. The group’s “Annual Music Study” revealed that while overall CD sales had actually slipped slightly, a 4 percent boost in legal music downloads last year more than compensated.

“CDs are the gift that keep giving, which proves that even in an increasingly digital age, consumers will respond to quality content and strong perceived value, even if it comes in a physical package,” said Russ Crupnick, senior vice president of industry analysis at NPD.

Crupnick noted CDs were most popular among older listeners who haven’t adapted to digital downloading and “super fans” who aren’t content with looking at track lists on a computer.

Tech savvy consumers have also increased in number, thanks in part to a smartphone explosion. The NPD found that digital music buyers jumped 14 percent to 45 million, leading to a similar spending boost at online music shops. Customers dropped an average of $49 on single and full-album downloads.

Arguably the most important finding of the study is that illegal downloading has consistently dropped, from 19 percent in 2006 to 13 percent in 2011. Crupnick chalked up the slow-but-steady five-year decline to industry lawsuits, P2P site closures and convenient legal alternatives sprouting up. Apple’s iTunes service has sold more than 10 billion tracks alone.

Both Grokster and Limewire, two popular options for free music, were forced to close in the past few years following aggressive lawsuits brought by the recording industry. This year, MegaUpload and BTJunkie have been wiped off the Internet map, the latter shutting down of its own accord. MegaUpload founder Kim Dotcom was arrested in New Zealand for running the site U.S. copyright holders have labeled part of a “mega conspiracy.” Dotcom is currently fighting extradition.

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There are 10 comments

SilverHedge42
MyCE Rookie
Posted on: 09 Mar 12 04:13
    RIAA Won't get a dime from me..
    Zod
    MyCE Resident
    Posted on: 10 Mar 12 16:06
      I guess I'm what the reference as a superfan. I still buy cd's of the bands I really like (which are few and far between).

      Then I rip it to FLAC and MP3 so I can use it in various portable devices.

      If a new CD is 12.99 and its also 12.99 on itunes, I'd rather get the physcial version and make my own digital copies that can play in anything.
      olyteddy
      Senior Moderator
      Posted on: 10 Mar 12 17:47
        Last couple of albums I bought the CD was actually cheaper...
        Dennis_Olof
        MyCE Member
        Posted on: 10 Mar 12 18:26
          I don't mind buying CDs but common, it is so 90s. The majority of pople who where spending money on music, just pay for tunes they like and stor it on digital media, mp3 players, itunes and all that.

          This has resulted in that the industry can't make as much money as they used to, the fat cats are on a forced diet. And the good old days won't come back. Sure people are still goign to buy CDs but they will spend money on quality or they just won't buy as much as the people who constantly had to get the latest music. Besides radio has allso advanced a lot, so it is much more easy to access music this way to becaus of satellite, webradio etc.

          The IRONY is that the industry was pointed in the right direction by NAPSTER, but failed to understand all of that. So instead we had to wait for iTunes that was the first real alternative to what the industry calls "illegal" downloading. The drawback is of course that the high, and way overpriced stuff they used to make lots of money on is gone and it ain't comming back.

          Thats way the fatcars are angry.
          Dartman
          MyCE Resident
          Posted on: 11 Mar 12 04:45
            I'd much rather have a hard copy of any music or video I like as then I can make copies to play in anything I own and save the original master in perfect shape for when I loose or damage my copy. I did the same when vinyl was king, dubbing everything to reel to reel and cassette so I still have albums with less then 10 passes on them.
            I hate DRM infested files and bad compression so a original unmolested disk is best for me but I haven't bough any CD's for a long time, what with the high prices and their stupid belief that EVERY CD has to be so heavily compressed that there is no dynamic range left and people think records sound better because of it.
            tmc8080
            MyCE Resident
            Posted on: 13 Mar 12 11:05
              1999 Was a turning point for those under 30 years old at the time.. so, they have a sweet spot of less than 20 years where they can still capitalize on physcial media with the now 40+ generation, but each and every year that will decline as this base continues to get older and older with less and less disposable income (thank you oil companies!).
              JetrellFo1969
              New Member
              Posted on: 11 Jul 12 19:02
                I used to love buying CD's but the "loudness war" really hacked my interest in them so I went back to my vinyl collection.

                Seán
                Senior Administrator & Reviewer
                Posted on: 15 Sep 12 00:59
                  Second hand CDs is a pretty good way of getting music cheaply. Sure there's always the risk of a badly scratched disc, but 10 CDs with 1 badly scratched is better value than 2 new CDs for the same price.

                  As an example, I recently bought a handful of albums for €2 to €3 each, all scratch-free and ripped successfully (including a DRM-crippled disc from the copy protection days.) Most of these albums were €10 as digital downloads.

                  I do agree that the loudness war spoils a lot of recent music and much of the music on the radio just doesn't last. For example, try thinking of how many chart songs from last year you would be interested in playing in a row right now. So I rarely buy anything in the charts. If I want to listen to the latest music, I just put on the radio. By the time the the radio stations stop playing the songs, I've already lost interest in them, unlike the good old 60's, 70's and 80's that I enjoy listening to all the time.
                  ChristineBCW
                  MyCE Die Hard
                  Posted on: 15 Sep 12 01:16
                    We have kiosks in a lot of performance clubs and bars here. Performers can bring in 300 or 500 CDs (or more) and load up the disk-tray, and folks can do card-swipes at $5 or $7 or $10 and get the CD.

                    Some clubs don't have cover-charges, so they get a cut of the per-disk sale, plus their beer sales, so they're not losing anything. When they get cover-charges, the band gets a cut of that plus all of the kiosk dollars, or they've got some agreement for a lower-than-usual cover-charge and a cut of the kiosk sales.

                    Virgin and Tower Records hate these things, but no one else does.
                    yojimbo197
                    MyCE Senior Member
                    Posted on: 15 Sep 12 09:01
                      Current music I tend to listen/preview on Spotify and Last.fm if I don't listen to Minnesota's Public Radio station online. There are a few bands I've gotten into that are current, including Iran and Grizzly Bear. Almost none of the chart toppers interest me at all. For a lot of those songs, its a stretch to even call them music.

                      I still buy some CD, but almost exclusively used. There are still some decent music stores in the Philly/S. Jersey area, so I"m usually able to find good used jazz and rock for 6.99-7.99 or less. One point not made is that there is a portion of jazz that hasn't been released to iTunes or Amazon.

                      As far as the loudness war goes, I haven't seen it affect the music and recordings of the bands I listen to that are still currently playing. And I'm damn sure not going to go to vinyl. Having moved 1600+ CD's recently, I can tell you that was enough of a moving and storage problem. 1600+ albums would probably break my back. Besides I've never heard a significant difference between a properly mastered CD and the same recording on vinyl.

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