48% of US teens did not purchase a single CD in 2007, compared to 38% in 2006.
According to The NPD Group, a market research firm in Port Washington, NY, the amount of music that US consumers acquired last year increased by 6%. However, despite a sharp increase in legal digital download revenues it was not enough to offset a declines in physical CD sales, which resulted in a net 10% decline in music spending (from $44 to $40 per capita among Internet users). As a result the overall portion of music consumption that consumers actually paid for fell to 42% in 2007 from 48% in 2006
NPD estimates that one million consumers dropped out of the CD buyer market in 2007, a flight led by younger consumers. In fact, some 48% of U.S. teens did not purchase a single CD in 2007, compared to 38% in 2006.
The percent of the Internet population in the US who used illegal P2P and file-sharing services reached a plateau of around 19% last year. But, the number of files each user downloaded increased, and P2P music sharing continued to grow aggressively among teens.
According to the study legal music downloads now account for 10% of all music acquired in the US, and is why Apple’s iTunes is amazingly now the second-largest music retailer in the US after Wal-Mart!
Twenty-nine million consumers acquired digital music legally, via pay-to-download sites last year, which is an increase of 5 million over the previous year. Sales growth was largely driven by consumers age 36 to 50 – a segment that was aggressively acquiring digital music-players in 2007.
“The continued growth in legal download sites is encouraging, yet the industry struggles to improve the value of each digital customer,” said Russ Crupnick, entertainment industry analyst for The NPD Group. “With so many baby boomers and gen-Xers entering the market, there are certainly opportunities to sell more digital albums, promote older catalog titles, or create bundles that will raise revenues. In the near term that’s going to be the best means available to narrow the gap on dwindling CD revenues.”
I think the fact that the percentage of teens that did not buy a physical CD last year increased by 12% should remind the music industry that music is going digital whether they like it or not. Teens have so many entertainment choices and options vying for a finite period of time that music has become a commodity like any other. If it’s not cheap, portable, and on-demand then they will simply choose something else that is. This is surely why P2P and file-sharing services have increased among this age group, for it allows them to get their favorite music for FREE whenever they want, and also to take it wherever they wish to go.
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what’s a cd?
I think it’s an acronym for something to do with music. It probably stands for “compact download”.
48% of US teens did not purchase a single CD in 2007? That’s 52% we need to convert still
I didn’t know teens still bought cds..
I’ve been not buying CDs for years it feels good to be part of the leading edge.
By the way the picture with the article is funny all of those racks of CDs and no one is there looking at them what does that tell you..
I actually think this is bad in a way. How are we supposed to get FLAC rips when CDs die?
I wonder how the whole economic situation in the US impacts the sale of CDs and if it has affected the numbers. If you suddenly don’t have money of course you’re not going to be buying as many CDs. I would imagine if the US falls into a massive recession music revenues for major companies are going to drop plain and simple.
I’m no teenager and I haven’t bought a c.d. since 2001. I have though been burning my MP3’s (and other formats) to blank C.D.’s. Now I believe that even that practice is shortly to be terminated.
No I’m not getting an I-Pod which I feel is just as big a ripoff as CD’s were ( a new model every month and you feel you need to “upgrade”; otherwise you’re not high tech enough.) The answer: flash drives. You can put just as many songs on them as your I-Pod and they’re way cheaper (and will get even cheaper as time goes on).
More and more car radios are coming out with USB ports in them; computers are getting smaller and smaller. Let I-Pods go out with the C.D.’s. (Sorry to change the topic a bit but they both have to do with getting ripped off and teens–as we all know–don’t have large amounts of cash lying around. And newsflash: neither do we Baby Boomers!)
CDs take up too much space. Superior quality; however just try to buy your 10GB of mp3s you have on your harddrive in CD format an see how much room you need to budget for it.
Teens like trends. One of the newer trends is owning an iPod. You cant put a CD into an iPod so buying CDs is going to be declining. And how many teens do you know that are allowed to get unlimited usage on their parents computer for doing their own needs.
The RIAA should just roll over and die already.
I agree with MaryJayne. This declining CD sales trend has more to do with the fact that first it was cool to have a boombox then it was a walkman then it was a discman then a little getto 32MB mp3 player that held like 15 songs (not enough to warrant not buying CDs since it was so small) and now it’s ipods that can carry your whole music collection. Obviously for most non tech savvy people it’s more convenient to just download a song for .99 cents and not have to worry about “getting a virus” lol (I’ve been P2Ping heavily and constantly for 10 years and don’t remember ever getting a virus although the last 2 years were on a mac…my favorite was when my friend thought that only sharing can give you a virus not downloading so he never shared what a moron) and so the rich people who can afford iTunes and the totally technically challenged people are buying music from iTunes because it easily goes right on their iPod. The tech savvy half are just downloading them illegally now and I honestly can’t think of a demographic that would be buying CDs. It’s a no brainer and I’m sure the RIAA knows it all but are making good enough money off iTunes music store sales and suing the illegal filesharers.