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Digital music sales to outpace CD sales

My local paper reports “sales of physical music media (CD) are expected to fall 8 percent to 10 percent this year, while sales of digital music could climb 150 percent to 200 percent. Digital music downloads will not destroy CD sales overnight but something is clearly changing in the music industry. In the third quarter, Apple’s iTunes Music Store made it the seventh-largest music retailer (according to NPD)”. The NPD Group (sales & marketing firm), founded in 1967, provides global consumer and retail information that helps manufacturers and retailers make more informed, fact-based decisions in order to optimize their businesses.

Based on this article, it implies many new customers are moving "more toward" digital music and not CD music. Revenue record labels are also losing as CD sales decline. If one looks ahead 5 years, what happens to CD music? Will digital music improve so much that it will sound better than CD music? Are there plans in the works to make digital music sound better than CD music? Do you have any comments?
hgeifman
pabelson
344 posts
 
About Apple, I hope it's true, but I'll believe it when I see it. At some point, bandwidth may be fast enough and cheap enough that it doesn't matter how big download files are, but we are very far away from that point right now. Apple Lossless would require 5-6 times the bandwidth. To replace half of all CD sales would take a 20-fold increase in downloads. So you're talking about needing more than 100 times the current bandwidth, simply to replace half of all CD sales with CD-quality downloads. It'll come, but don't hold your breath.

Besides, what Apple really needs bandwidth for is video. If they had more bandwidth right now, which do you think they would do with it: make their music files larger, or offer more and longer video content?
cruz123
586 posts
 
My guess (as I haven't seen the articles mentioned) is that the growth of downloaded music is generated primarily by a small segment of the population, i.e. those 25 and under. The biggest obstacle to those in the music download business, will be to find a way to sell that method of music buying to all demographics. For example, my 70 yr. old parents, will buy a CD, but they're not going to download anything. When that "25 and under group" becomes the "50 and under group", the download business will be sitting pretty. But until that occurs, I think a strong market will remain for over-the-counter music sales.
pabelson
344 posts
 
Cruz: The people who are downloading music lean young. But the people who are *paying* for downloads do not lean quite so young. Still, I agree with you that this is a generational thing. Eventually, all the people who need a shiny disk in their grubby little hands will be dead.
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