Online music sales have grown to more than a third of all music sold in the US, with iTunes making up a full quarter. CD sales remain dominant, but given the trajectory of online sales, that may not last for long.
Music sold through the iTunes Store makes up a full quarter of all music sold in the US, according to a new report from the NPD Group. The market research firm noted that paid digital music downloads have continued to grow since 2007 (from 20 percent to 35 percent this year) with the help of iTunes, Amazon, and Walmart's online offerings, and that digital music sales may even equal CD sales by the end of 2010.
iTunes remains in the lead for all music sold in the US at 25 percent of "music units sold," up from 21 percent last year and 14 percent in 2007. Comparatively, Walmart (meshing its online and physical CD sales) remains in second place overall with 14 percent of all music sold, while Best Buy came in third. When looking at only online sales, iTunes made up 69 percent of the digital music market in the first half of 2009 and Amazon MP3 came in second at eight percent.
CDs, however, aren't dead (yet). They remain the most popular music format at 65 percent of all music sold during 2009 thus far, with Walmart leading the physical sales market with 20 percent share. NPD's VP of entertainment industry analysis Russ Crupnick pointed out that big box retailers shouldn't be dismissed for this exact reason—so long as the majority of music sold in the US is still on CD.
He warned, however, that the trend may not last for long. "Many people are surprised that the CD is still the dominant music delivery format, given the attention to digital music and the shrinking retail footprint for physical products," Crupnick said. "But with digital music sales growing at 15 to 20 percent, and CDs falling by an equal proportion, digital music sales will nearly equal CD sales by the end of 2010."
Indeed, NPD reported earlier this year that 17 million people stopped buying CDs in 2008 despite the fact that the number of music listeners is going up. CD sales have been tanking for quite some time, but a leveling out in 2010 seems pretty ambitious—it would mean a 20 percentage point growth over the next year for online music, and a 20 percentage point drop for CD sales. Still, the writing is on the wall for CDs, even if teenagers still like them—for sharing burned tracks with each other, that is.
Source: ars technica