NPD Group claims 24 million fewer people bought music in 2009, and that more troublingly, despite a decrease in the amount of music files being shared on P2P networks, the number of people buying digital music declined as well.
Consumer and retail market research firm NPD Group spelled out a long list of troubling statistics at a gathering of music and technology executives at the Digital Music East conference yesterday that highlight an industry in transition.
Russ Crupnick, one of the group’s senior industry analysts, first estimated that 24 million fewer people bought music in 2007 as compared to 2009. That’s a 21% drop in customers, a figure sure to raise more than a few eyebrows, myself included.
Unsurprisingly there were 33 million fewer CD buyers in the US, and 24 million fewer music buyers worldwide. Total music spending also fell by 19%, but spending by individual consumer actually rose by 2%. Spending by digital music listeners was even up from $33 to $50 per year.
However, even more disturbing for record labels is that the number of people buying digital music – the CD’s replacement and the hopeful savior of the music industry – has declined as well, down to 34.6 million from 35.2 million.
This decline nicely mirrors an NPD Group study from last April that found teens acquired 19% less music, both legally and illegally, in 2008 than they did in 2007. This includes a 6% decline in usage of P2P networks to download music illegally, meaning the music industry’s woes are much greater than illegal file-sharing as it would often have you believe.
That study also found that one of the reasons for the decline in music acquisitions by teens is due to changes in the way they listen to music. More teens are choosing free online music streaming sites like Pandora or Last.fm than ever before.
So what is the music industry to do? Crupnick emphasized that the increase in per person music consumption was reason for optimism.
With so many alternative entertainment options these days he suggested that consumers need further incentive to buy, and that record labels should try bundling songs in a package like perhaps 3 for $1.
“You got some maturity in the marketplace,” said Crupnick. “If I ran a record label, the first thing I would do is go out and hire a consumer promotion person from Kraft or Colgate. The consumer is saying they wanted to be promoted to and persuaded to come try this.”
These comments echo what Pharrell Williams, Billboards’ producer of the decade, and Grammy Award-winning singer, songwriter, said this past January at a music industry trade fair when he recommended artists “market” themselves and chase advertisers rather than record labels.
Stay tuned.
The reason you are seeing both sales and P2P decline simultaneously is because songs and entire albums can be downloaded easier and faster via “download service” sites (megaupload, rapidshare, zshare, etc).
When bloggers leak albums or put up tracks for download (which can be found just be Googling), they host the files on those services. It’s a terrible omen for labels. The labels should have tried to profit from the P2P infrastructure, now they are dealing with REAL pirates, not just kids.
The last artist I thought was even remotely inspiring or interesting that was mainstream was Linkin Park. Hated Coldplay and Whitestripes and things pretty much went down from there. Some of the music, I swear, was just trying to be awful. It wasn’t even an attempt to sound listenable, it was almost like a contest to produce the worst songs possible while seeing if people will still buy in the end.
Meanwhile, the independent stuff continues to lead the way with creative sound, interesting lyrics and, well, something that won’t make me gag 30 seconds in for either being really old or really really bad.
RIAA/mainstream music is like Internet Explorer, sure it can slugglishly and annoyingly pass itself off like it says it is, but once you actually figure out that there’s better alternatives out there, you wonder how the heck you put up with it for so long.
I’m glad I’m not the only one to notice that the music hasn’t been great (overall) and hey how about the economy, just millions of people would rather eat that buy music.
Won’t matter, music industry will lie, cheat and steal and bend over backwards to blame YOU the customer. Screw em.
Does anyone else remember hearing something about a recession, ir is it just my imagination ? . . .
Come on that’s because 2009/2010 music/artist just sucks.
because music sucks….
think about it, 80s and even 90s are far better.
even pre 80s music and classic music is by far better.
I think it just had to do with increased entertainment options….music is more of a soundtrack these days than a destination unto itself….and competes with finite entertainment budget dollars with the likes of movies, video games, iPhone apps, etc..
Yeah, who wants to buy autotuned hip hop crap.