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. Oh, and @Al: “There is no way you can tell the difference between a 256 kbps AAC file and a CD playing the same passage of any recording you’d like to listen to.

    Tell you what: find some professional audio engineers in your area and make that statement to them; see what kind of response you get.

    And by the way, Al: how long have you worked for Apple?

  2. @ alansky:

    Why buy $600 iPod speakers? Well, iPods can play uncompressed audio and there are many audiophiles who do just that. That’s one of the reasons the larger (160GB) iPods have a market as uncompressed music requires a lot more storage space.

  3. Human ear?

    It’s not ONLY the human ear that experiences the music.

    And audiophiles CAN often distinguish between 256 AAC files and the files on CDs.

    What music are you all listening to?

    I have a half decent stereo system, and I bemoan not being able to get the high quality of CD.

    Yes, I also purchase from iTunes, but I do so KNOWING that I am NOT going to get the same sonic quality at 256 that I get from the same music on a CD.

    It is always the weakest leak in the system, and if you buy an iPod with ear plugs, then even 256 AAC is overkill.

    If you listen to it on a middle of the road home theatre or stereo system, you can hear the difference.

    Ever wonder why some speakers and stereo systems go above 20,000 Hz now? It’s because the human (not just his ears) can experience the harmonics that goes above that range.

    If you have that type of equpment, as mentioned by someone above who has an audiophile friend, you WILL hear and feel the difference.

    It is easier to listen to. You can listen for longer periods of time without fatigue.

    Yes, if you are listening to a $500 or worse system, then 256 AAC is quite enough.

    If you are listening to a higher end HT/stereo system, then it just is not enough.

    Put 256 kbps into a decent movie, and you’ll notice the difference too.

    It’s not JUST about the supposedly accurate measuring of the range of human hearing, it is what the entire body feels when as wide a dynamic range can be enjoyed, along with those harmonics that are produced, and sometimes recorded, by instruments in real life.

    CDs are dying. Here’s hoping bandwidth down the road allows for Apple Lossless size files and the resultant greater sound.

    We are living in a society that has been brought up with sub-standard sound, and this isn’t just recent.

    I have a pretty decent system, but even I go to friend’s places with better systems and better sound sources and thoroughly enjoy the difference.

    Take someone who has LOVED their Logitec 2 speaker plus woofer system to my place, and see how much they enjoy what they THOUGHT was fantastic music sound.

    I just thought I’d way in on the whole 256 AAC is the cat’s meow discussion.

    Am I happy that we are hopefully moving toward non-DRM 256 AAC? Yes. Because that is where I can find most of my music these days, and it is decent quality.

    But don’t tell me it compares to the same CD, unless the original CD was just a bad recording in the first place.

    Happy New Year to you all!

    Greg

  4. I must be getting old but I agree with Sixvodkas. Although the cause may be debatable, there is indeed soooo much crap that is put out these days. I usually get ~$100 in music certificates for Christmas and birthdays because I love music and truly enjoy spending a day at a music store listening to albums and buying what I like including new artists. Ir seems these days, after a few hours, I only have about two CDs that I like where 50% of the songs on it are good enough to warrant its purchase. Too often now when I get a great song the rest of the album sucks.

    I find myself purchasing concert videos more and more which is nice but poor substitute.

  5. I would think most people in the 20-35 age group simply are not buying cd’s anymore. Part of the problem is the lack of good new artists and those that come out have maybe a handful of good songs so a la carte is the way to go. Another thing is how many ways can record companies repackage back catalog for the die hards? I don’t even know how many “remasters” of Zeppelin I own at this point across multiple formats.

    I have an extensive music collection over 1,500 cd’s not to mention vinyl (which I still buy). I have not bought a cd since the middle 90’s. Frankly there are enough ways to get whatever music you want so why even bother with iTunes the and like which offer crappy encoding / low bitrate? The record companies did this to themselves by never lowering the price of CDs and adjusting to the advancements in computer / digital technology.

    I also feel MTV played a huge role as when they actually played MUSIC video’s it drove music sales and artists. I don’t know how many new artists I discovered on 120 minutes. Now it’s one lame “reality” show after another and just plain bad hip hop. At least Yo! MTV raps played a variety. Nas had it right – Hip Hop is dead.

  6. There are many valid points in this discussion.

    When I was younger, a “friend” of mine owned a music store which sold some pretty high-end equipment. He would get some demos of various bands and other sound effects (helicopters, animals, etc) and play them on the best systems. The sound was incredible, it was like you were actually standing there in presence. The first time I experienced it, he played a recording of a commercial jet liner coming in for a landing. His store was actually located about 1 mile from the airport directly in the flight path. I thought a real jet was landing and had to look outside the store to make sure he wasn’t lying. In some of the music demos, we could actually point to where the musician was “standing” and if we closed our eyes would swear that we were on stage with the band.

    I no longer have access to such sound systems, and I wish I did.

    @Gregori

    You are right in that the musician should have the prerogative to determine the way they create and disseminate their music. If they only want to do so in a album format so be it. However, they must live with the consequences. The consumer will vote with their wallets.
    An example is when the country music group Dixie Chicks came out with their criticism of the “Iraqi situation”. (No statement of whether right or wrong) The consumers voted not to buy their music or attend their concerts. So, the consumers will vote to either buy the entire album as produced by the musician or to acquire a single by other means.

    Personally, I don’t illegally download music anymore but instead purchase most of the time thru the iTunes store. I have once bought an entire CD (a training CD for the children’s church program) for just one song. Most of the music I listen to is older stuff. Only occasionally is it in album sequence.

    One of my favorite albums to play in sequence is Dire Straits “Communique”.

    If you have a favorite album to play in sequence list it here. Poll suggestion!!!!!!!

  7. I’ll tell you the truth why music sales are down

    It’s called market saturation.

    The “ala carte” method of downloading songs has enabled people to spend their money wisely, getting maximum bang for their buck.

    There is only so much music a person can listen to at a time and with a large enough music library, never get bored.

    For instance I have nearly 9000 legal songs, all neatly catagorized and volume leveled.

    I got music for every mood and really don’t need anymore. Lend my iPod to friends and they all come back with their own for me to fill up. But I refuse to fill them, because the music must be digitally signed if sold without copy protection. One day when Apple/iPod/iTunes bites it, the RIAA will come knocking for sure.

    One thing, make sure you have MANY backups. DVD, hard drives and Library on iPod in Disk Mode.

    It took me years to get my music perfect, Genius does a half job.

  8. Can we have some links to studies showing CDs have demonstrable sonic differences from AAC or MP3, and at what bitrate do these audiophiles lose the ability to distinguish between the two?

    You’d think the labels would trot those studies out once in a while to convince people to buy more CDs.

  9. What sounds good and perfectly adequate to the majority of the populous may not sound as good to an Audiophile but it may have nothing to do with the bit rate of a digital music file. The equipment on which music is reproduced definitely has some influence on the perception of that music, but that perception cannot be taken out of the context of our own personal construct.

    I wonder what percentage of the self professed audiophiles posting here have ever had an audiogram done to determine the frequency response of their own hearing. Sensory reproduction is not only dependent on the equipment used and digital sampling rate but also the respondents perceptual abilities.

    I knew a few people in the past that spent thousands of dollars buying the perfect amp (had to be tube for warmth) the perfect speakers (as large a base as possible with appropriate horn tweeters and solid mid range but had to have 2 decent crossover networks that were adjustable). Sounds great in the store (usually special sound rooms in the high end audiophile shop). Bring that crap home and it all had to be set up properly and retuned because of where your couch was located and your living room has 2 solid reflective walls not 4 , and you have shag carpet not wood floors.

    I’m not saying that what the audiophiles are proclaiming regarding their perception of music quality isn’t true. What I am saying is their perception is a combination of both the reproduction equipment and their own hearing response. It may very well be that a 128 bit rate AAC run through a tube amp with speakers tuned to that person’s audiogram is indistinguishable from a CD or 256 bit AAC encoding . Most vinyl that I know of always had that annoying hiss or rumble depending on equipment . The makers of high end equipment have always overpriced their stuff because only a limited few are willing to pay these prices.

  10. Music. Good Music, that’s the answer.
    Just like movies, good is good regardless if it’s new.
    “The Killers” from 1946 will always be a better movie than “SAW V” Period. “The Smiths” will always be better than “Lil Wayne”.
    (He’s not the worst rapper ever, but like Emininem, only average if you truly know hip hop) The point being, Music and Movies are more exploitive than artistic nowadays, and newer artists follow the
    ‘what’ll sell?’ trend, rather than become unique people. Record labels are winning the ‘bad music’ war by promoting these homogenous groups. Before anybody in their right mind pays even $10 for a physical or digital album, they’ll buy the best few songs for $1 each. Rap is the worst offender ever. WTF is a ‘skit’ doing on a rap album? An average of 5 skits per CD is BS. Period. It’s no wonder better musicians are coming from overseas, and we’re remaking old foreign movies like
    Bangkok Dangerous with american actors, and still using the same foreign director from their original movie. We’ve lost our originality. Period. Make better music and movies
    – and they will come.

  11. “record labels as they try to migrate to digital sales on services like Apple Inc.’s iTunes”

    Migrate? I thought they were trying to sabotage Apple’s ITMS.

    Time to stop bitting the hand that feeds you!

  12. @bobchr

    You make some valid points about the importance of the entire reproduction chain, well, actually, one must include the recording itself as well.

    Next, the music to be played and compared must be analogue. Some hip-hop diddy, which has gone through endless loops and always existing within an electronic envelope so to speak, probably sounds just fine on a wide range of equipment and resolutions …. indeed, it was “designed” to do just that, like the old AM tunes.

    When it comes to non-modified sounds, like the human voice (and I don’t mean those squeaky teens riding on waves of equalization), the difference becomes much clearer, because we have something to relate to.

    As to the differences even something “minor” can male, allow me an anecdote from the field of audio esoterica. ” width=”19″ height=”19″ alt=”wink” style=”border:0;” />

    In a previous life, I was an audiophile, and I am not ashamed of it. ” width=”19″ height=”19″ alt=”wink” style=”border:0;” /> My system was relatively simple – a Linn turntable, a Revox CD, Counterpoint Tube-Hybrid electronics and a pair of QUAD electrostatics.
    One day, a friend, working in the audio business, came over with a couple of speaker wires, ranging from $300 to almost $1000. Being an agnostic, I just scoffed at the idea of paying that kind of money .. for… wire!

    He left me the expensive set and I first listened to my regular better grade Kimber Kable, using a variety of life recordings.
    Then I changed to the expensive stuff (sorry, I forget the name) and sat back.
    Yes, there was a difference. The tonal range seemed fuller, softer, more analogue, but I was missing the soundstage. The sound came from within the confines of the speakers, instead of laterally extending into the room as the QUADS do so wonderfully.

    So, I looked at the cables and saw arrows printed on the casing. I had put them in pointing in the “wrong” direction. Yeah, right …. I muttered but changed them anyway.
    I can tell you, I sat there, mouth wide open, when I now played the same cuts. It was like day and night! Fabulous!
    I didn’t buy them and it took me a few days to forget their sound and be happy again. But it made me less cynical about such things. Sure, much of it is voodoo, and like with other hobbyists, one needs to prioritize.
    But saying that people can’t hear the difference between various media and formats is wrong. It may not be measurable, but I can tell you that on the same system, I find listening to a String Quartet in AAC256 physically uncomfortable.

    It is a shame that, while we now have incredible computing power, storage capacity and bandwidth, all efforts seem directed at compression technologies, generating audio fast-food instead of also making a no-holds-barred stab at top fidelity.
    We are losing something important in the process.

  13. @Bertos
    “THE CONSUMER IS ALWAYS RIGHT.
    Otherwise your out of business buddy.”

    You mean, like the US automobile industry? Ooops.
    In an ever more complex technological market place, the consumer often has absolutely NO clue what he should buy and thus is led by advertising and often rather spurious claims.
    So, the onus also rests with providers and manufacturer, and on that score, I’m afraid, most have not been doing a good job.
    I give you an example from my own work. I digitize 8mm movie films. Most of my competitors simply output them to Video-DVD, because that is simple and the client wants to play them on their DVD-Player. BUT, as we all probably know, that involves rather drastic compression, and the files are difficult to later edit. That is short sighted. I only deliver AVI files (also in Full-HD), because that is truly archival and easy to work with. So, I spend a lot of time educating people and in the process I also lose a few. However, I would be giving people poor advice, if I simply did what they think they want.

    The main emphasis, lately, has been placed on convenience, even if that meant sacrificing quality. I wonder, how many people ripped their CDs and then got rid off them, because they figured that they didn’t need them any more. Nice for collectors like me, who find some real sweet deal on the used market, but surely not the best choice for the consumer himself.

    Anyway, just figure that an informed consumer is a better customer.

  14. Love the discussion here, especially about vinyl being superior to CD, and on a good well balanced turntable with a fresh needle a clean vinyl record gets my vote.

    That being said, I think the environment itself it important, and some of the best music I have heard has been outside, as it just flows over you. Fields, parts and the forest. I used to listen to some great music on an outside stage on an island, near the water. Notably on the water, something haunting about listening to music on water when done right. I think it has to do with the fact that is just flows by, and doesn’t really come back. No interference patterns. Mind you there are some excellent concert halls, and churches can also be good, depending on the music.

    And some music, well is very nice live, no electronics, or editing, just live. Beautiful.

    It makes the experience special, especially when I really listening to music.

  15. prenzelberger… thanks for the observations.

    As a primarily “classical” music listener, it’s all about the space and the specific sound of instruments moving through air. The concert hall, the soloists, singers, etc.

    Well recorded music recordings played back on good equipment make all the difference. The better both are, the more space you hear: the width of the stage, the depth, the location of particular instruments and space between them. It may sound like hocus pocus to listeners of processed music, but it’s there.

    Unfortunately for most people have no idea what “real music” sounds like, even live. This is not a value judgment about the kind of music it is, just how it’s presented. I’ve been to live concerts in clubs where the sound systems were so bad you could barely tell what the instruments were. It’s not hi-fi, as in closely reproducing the source music, it’s just LOUD. It’s a real shame.

    I’ve also heard heavily amplified music in Carnegie Hall that not only did NOT need amplification, but sounded dreadful.

    It’s not about being a snotty classical music or audiophile freak ” width=”19″ height=”19″ alt=”wink” style=”border:0;” /> , it’s about the pleasure of the sound. I must say, that AAC or mp3, whatever the sampling rate just doesn’t do it. I sample my CDs with Apple Lossless, but would NEVER play it over my “real hi-fi”, they’re for iPod and MacBook Pro use ONLY. I bought good headphones (Grado SR325 and Etymotic ER4S) for listening on my iPod.

    It DOES makes a difference, if you know that there IS a difference.

  16. @Bertos: “The consumer is always right.” Who said they weren’t? You’re confusing the issue of consumer rights with artist’s rights; they may sometimes be in opposition, but they aren’t mutually exclusive. Consumers have the right to, as they say, “vote with their dollars” and artists have the right to conduct their business as they see fit. In your worldview, artists merely exist to provide you with the entertainment you demand. Artists, on the other hand, do what they feel they need to do, and hope to find an audience for their work, be they musicians, film makers, writers, etc.; most want an audience, but most will also continue doing what they do regardless. That’s something that non-creative types just don’t get.

    I assure you, my skull is not thick, though I suspect from your angry tone that yours may be shrinking, as you’ve clearly not really thought about this issue. But I understand where you’re coming from: it’s much easier to issue personal attacks than to question your own role in the marketplace.

  17. @Jeff: “All modern music is made for 7 year olds.”

    This statement is wrong beyond belief; are you being sarcastic or facetious? Have you listened to ANY contemporary jazz or orchestral music? Do you think NIN’s Ghosts is made for 7 year olds? Have you heard the album made by Robert Plant and Alison Kraus? Do you know that the Grammy for album of the year in 2008 was won by Herbie Hancock for a tribute to Joni Mitchell? TV on the Radio is for 7 year olds? Arcade Fire? Putting aside discussions of the music’s worth, all of this qualifies as modern music.

  18. re: Grigory (to Jeff): not to mention the recent performance of a fresh new piano concerto by Elliot Carter (who wrote it to celebrate his own 100th birthday, no less!), performed by the Boston Symphony Orchestra, with Daniel Baremboim (and James Levine conducting) at the Carnegie Hall! Not much more modern music than that! And I doubt any 7-year old could sit through more than 5 minutes of that (and this includes my own daughter, who was raised on the NY Times Classical radio)…

    Mr. Reeeee:

    Carnegie Hall is probably the wrongest possible venue for electronically amplified sound. I have attended several jazz performances there (including Oscar Peterson, about two years after his stroke), and the hall was all awash with the muddled sound; quite frustrating. Subsequent performance at the Blue Note was just perfect.

    And to Prenzelberger:

    What do you use do digitase 8mm film? Flatbed scanners? Slide/film scanners? Any special equipment? How do you build AVI out of it? I’m very curious, as I have hundreds of metres of 8mm from 60’s, 70s, even 80s…

  19. Albums (CDs) are dead. To all the naysayers who bleat about artistic integrity in the entire played straight through sequence, BULL! If that were truely the case there would be no such thing as the “Greatest Hits” CD or album.

    Consumers are finally in charge again, being able to buy just what we want to listen to, and not all the other crap filler on MOST of todays’ popular artist recordings.

  20. I love the way everyone wants the major labels to die. Dont get me wrong in some sad weird way it would be quite nice. No more big boss labels killing the little guy. However has anyone stopped to think about what this actually means. If we look back without these big beast labels we would not of had some of the fantastic music we all now love and adore…. The second highlighted defense of a major for me though is this. Artists are the reason why CD sales have fallen. They lead you to believe that labels are screwing them like the cheap whores they are for every dime they have. Is it me or do they all have huge houses on cribs? Artists have got more and more greedy over the years and now the industry is not producing as much money due to illegally downloaded material they are continuing in the same rich greedy fashion that is prevalent across the whole industry. How can you continue to play the same we are getting screwed card when really the only ones getting screwed is the label as they are being held to ransom by shitty artists diva like demands. It is the same in the soccer industry in England players get paid loads of money then moan about how they get treated real shit by the club show no loyalty and still get paid 150,000 pounds per week. But because they are adored like many an artist they could say or do anything without themselves looking bad. It is about time that fans realised the only ones screwing anyone is the bands themselves who charge you crazy money to watch them crazy money to buy a t-shirt watch mug etc, and for what so they can continue to bite the hand that feeds them. Wake up guys and realise your favorite band is the one that is sucking your cash not the label not itunes….

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.