Music CD sales plunge 20 percent

“Increases in digitally downloaded albums and songs were not enough to offset a nearly 20% plunge in CD sales in the U.S., according to year-end figures published Wednesday by the Nielsen Co.’s SoundScan service,” Ethan Smith reports for The Wall Street Journal.

CD sales declined “to 360.6 million in 2008, from 449.2 million a year earlier—has hurt the four major record labels as they try to migrate to digital sales on services like Apple Inc.’s iTunes Store, which in 2008 surpassed Wal-Mart Stores Inc. as the world’s largest music retailer,” Smith reports. “U.S. album sales including digital downloads fell 14% for the year, while factoring in individual song downloads, sales were off 8.5%.”

“Vivendi SA’s Universal Music Group remained the biggest player, with 31.5% of the market. Sony Corp.’s Sony BMG Music Entertainment was No. 2, with 25.3%. Both those companies’ market shares were roughly equal to their 2007 levels. Warner Music Group Corp. gained more than a percentage point to reach a 21.4% share, while No. 4 EMI Group Ltd., amid numerous financial and operational problems, saw its share of the market fall below 9%,” Smith reports.

Full article (subscription required) here.

Music cartels, it’s really quite simple: Go DRM-free and higher quality on iTunes Store and you’ll sell more music.

56 Comments

  1. I also worry about loss of quality. I lay awake almost every night thinking, what am I going to do? This is a real problem. Maybe the federal government can come up with a bail-out plan.

  2. MDN’s take is only part of the “problem” for the cartels. CDs are dead. Why buy a whole album when all you want is only one (or a couple) of the songs.

    Not to mention that many, and I mean many, bands (and those with original talent) are doing direct distribution, or signing with independent labels. They have realized that they don’t need the big cartels to sell music, as long as they keep it good.

  3. oh ya, not just encoding, but crappy speaker systems and small earbuds are diminishing music quality too. Not just low encoding.

    My brother has a special room in his house for listening to music. Everything is high end and he is an audiophile.

    When I visit him and listen to music with him, I am amazed at what I am missing listening to the same music on my own.

    I can not afford what he does. But there is a true pleasure I am missing because I can’t.

  4. I’m a bit surprised – and gladdened – to hear of the concern over sound quality. Discs could have had a longer lifespan if the, um, “cartels” (boy, MDN really loves that, don’t they) hadn’t retained audio standards set in the early 80s and had, instead, raised standards like EVERYTHING ELSE digital. That’s not just the labels, of course; it’s also the hardware manufacturers’ fault.

    Sixvodkas, if the “music currently available” truly SUCKED then how do you explain the increase in music piracy? Please don’t suggest that the music is “good enough to steal but not pay for”; that would be a pretty lame reason.

    On a related note, vinyl record sales have doubled; perhaps there is hope for sound quality after all.

  5. I do seriously worry about the loss of quality when comparing CD music versus digital downloaded music. —Megame

    Me, too. I saw an ad the other day for a $600 iPod speaker system and couldn’t help wondering why anyone would need such an expensive rig to play compressed music files, which lose a great deal of information compared to the original despite sounding very clear for casual listening. Just as the images taken by the cheapest digital SLR are far superior to those produced by even the best pocket camera, the musical quality of a CD played on a modest home stereo is far superior to even the best reproduction of the same music in mp3 or AAC format.

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