The industry is facing the music once again and the sound is definitely not a pleasant one: the digital downloads business is rapidly growing, while CD sales continue to go down, down, down.
The iTunes is now the second largest music retailer in the U.S. says an NPD study. Apple's digital store has surpassed Best Buy and is right behind giant Wal-Mart. Apple announced that it had attracted 50 million iTunes store customers and sold over four billion songs. As a fun fact, over 20 million songs were sold on Christmas Day 2007.
The report, which includes the sales of both physical CDs and digital music, states that the numbers of digital music buyers grew by 5 million in 2007 (up to 29 million from a previous 24)
And now, for the bad news. NPD stated that around one million consumers decided to stop buying CDs last year, with teens leading the trend. According to estimation, around 48% of teens in the U.S. bought no CDs last year, 10% more than one year before (38%). If the trend grows at this pace (if not more rapidly), CDs and US teens will have nothing to do with each other by 2013. Talk about 13 and bad luck
In addition, teens are also more and more inclined to download music files via P2P, with such activities increasing during the past year.
Last but not least, the worst news for the music industry execs is that the overall music spending went down 10%. The most likely explanation would be linked to digital downloads: with customers now able to buy a single track instead of an entire album, less and less people are inclined to spend more.
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