From Al's Morning Meeting, the Poynter Institute, 26/03/07:
Music compact disc sales dropped a stunning 20 percent in the first three months of 2007. What filled a part of the void? Downloads of individual songs.
According to AFP, Nielsen SoundScan says 89 million CDs were sold between the start of the year and March 18, significantly fewer than the 112 million that were sold during the same time a year ago.
The Wall Street Journal reports that in recent weeks, record companies have seen some of their weakest sales ever. Already this year, Nielsen Soundscan has recorded the two lowest-selling number one albums since the company was launched in 1991. The Journal story says:
The sharp slide in sales of CDs, which still account for more than 85 percent of music sold, has far eclipsed the growth in sales of digital downloads, which were supposed to have been the industry's salvation.
The slide stems from the confluence of long-simmering factors that are now feeding off each other, including the demise of specialty music retailers like longtime music mecca Tower Records. About 800 music stores, including Tower's 89 locations, closed in 2006 alone.
Apple Inc.'s sale of around 100 million iPods shows that music remains a powerful force in the lives of consumers. But because of the Internet, those consumers have more ways to obtain music now than they did a decade ago, when walking into a store and buying it was the only option.
Today, popular songs and albums -- and countless lesser-known works -- can be easily found online, in either legal or pirated forms. While the music industry hopes that those songs will be purchased through legal services like Apple's iTunes Store, consumers can often listen to them on MySpace pages or download them free from other sources, such as so-called MP3 blogs.
Jeff Rabhan, who manages artists and music producers including Jermaine Dupri, Kelis and Elliott Yamin, says CDs have become little more than advertisements for more-lucrative goods like concert tickets and T-shirts. "Sales are so down and so off that, as a manager, I look at a CD as part of the marketing of an artist, more than as an income stream," says Mr. Rabhan. "It's the vehicle that drives the tour, the merchandise, building the brand, and that's it. There's no money."
HMV (don't know if you have HMV in the States) has <a href="http://www.thisismoney.co.uk/investing-and-markets/article.html?in_article_id=418366&in_page_id=3&ct=5">announced restructuring and the possible entry into small electronics.</a>.
I also read somewhere that Canada had actually posted a Q1 growth in music sales, but now I can't find that reference anywhere...it was probably just Nelly Furtado, Nickelback and BNL cds anyways...