US Digital Music Sales to Surpass CDs in 2012

[Don]

http://www.piracynetwork.com/piracy-new ... -2012.html

Strategy Analytics predicts that physical CD sales will decline by nearly a third this year, and that combined with a growth of digital music revenues expected to reach $2.7 billion will for the first time put digital music sales on top.
According to Strategy Analytics, a market forecasting firm, by next year US consumers will for the first time spend more money purchasing digital music than they will physical CDs.

In the report, entitled “Global Recorded Music Market Forecast,” its Digital Media Strategies service says that physical CD revenues, which already plunged 16% to $3.8 billion last year, will decline an additional 29% this year to $2.7 billion.

Meanwhile, it says that digital music revenues will continue to grow, reaching $2.8 billion next year, and therefore surpassing CD sales for the first time.

“Digital music is not developing as fast as expected,” says Martin Olausson, Director of Digital Media research at Strategy Analytics. “While online revenues will expand further over the coming years, the overall size of the recorded music industry will continue to contract as record companies struggle to identify growth strategies.”

Strategy Analytics predicts that while single track downloads will remain the single most important source of digital music revenue, advertising and subscription models will become increasingly important over the next five years.

It says that by 2015 we can expect the following breakdown of revenues:

•39% – single track downloads
•32% – album downloads subscription
•14% – subscription
•14% – advertising
“Music companies must look beyond download-to-own for digital revenue growth,” says Jia Wu, Senior Analyst. “With rapid adoption of connected devices and ubiquitous broadband, music fans will expect greater flexibility and wider consumption choices.

The report ought to bolster critics of the music industry’s war on illegal file-sharing as it illustrates that consumer tastes are what is largely behind the decline in physical CD sales; and since digital music is cheaper and affords more options to “cherry pick” content the revenues will never equal one another.

Stay tuned.

[Melissa]

I wonder if cd prices will finally come down a little more decent if so. I laugh when I see some cd's, even OLD ones, priced at $25 or even $29 sometimes, and then wonder who the hell is paying those prices?

[Pelata]

I often wonder why CD prices don't lower with age the way DVD prices do. The only CDs that lower price with age are ones that didn't sell well to begin with and they have too much stock of.

I can go buy a brand new sealed copy of The Wizard Of Oz (Special Edition) on DVD right now for $9.99, but Dark Side Of The Moon is still $15.99...

[Andrew]

Digital is only goign to match physical sales because physical is dropping like a stone. Digital sales are not even close to replacing those sales.

[steveo777]

I think the real culprit is that too many people are either stealing their music or getting copies from friends, hence less people actually paying for the music they listen to.
Seeing kids suddenly "accumulate" all kinds of music is highly suspect. They don't have enough money to procure so much music in such a short period of time. I don't
doubt that digital downloads have become the method of choice for those who do pay for music. Some people won't go to Walmart. I tried it a couple times and thought
I was in Mexico.

[S2M]

If bands actually put out quality music, and not 2 great songs and a bunch of filler for $14.99, maybe people wouldn't steal it....just a thought.

[Andrew]

If bands actually put out quality music, and not 2 great songs and a bunch of filler for $14.99, maybe people wouldn't steal it....just a thought.

People are stealing everything...you can't compete with free. The quality of the music is not the main issue.

[S2M]

If bands actually put out quality music, and not 2 great songs and a bunch of filler for $14.99, maybe people wouldn't steal it....just a thought.

People are stealing everything...you can't compete with free. The quality of the music is not the main issue.

Yeah, but you don't get a booklet with 'free'....

[Don]

I always wondered why the Japanese got cool stuff with their CDs while here in the states, we didn't. Leather CD cases, guitar picks, hologram stickers and fifty page photo booklets. Why did they never offer that stuff here?

[S2M]

I always wondered why the Japanese got cool stuff with their CDs while here in the states, we didn't. Leather CD cases, guitar picks, hologram stickers and fifty page photo booklets. Why did they never offer that stuff here?

Are you talking about that 'Obi' strip?

[Andrew]

If bands actually put out quality music, and not 2 great songs and a bunch of filler for $14.99, maybe people wouldn't steal it....just a thought.

People are stealing everything...you can't compete with free. The quality of the music is not the main issue.

Yeah, but you don't get a booklet with 'free'....

You don't have to convince me FFS.