SAN FRANCISCO — Going to the mall to buy music may no longer be a rite of passage for adolescents.
For the first time last year, nearly half of all teenagers bought no compact discs, a dramatic increase from 2006, when 38% of teens shunned such purchases, according to a new report released Tuesday.
The illegal sharing of music online continued to soar in 2007, but there was one sign of hope that legal downloading was picking up steam. In the last year, Apple Inc.'s iTunes store, which sells only digital downloads, jumped ahead of Best Buy Co. to become the No. 2 U.S. music seller, trailing Wal-Mart Stores Inc.
That could be hopeful news for the music industry, which has been scrambling in recent years to replace its rapidly disappearing CD sales with music sold online. The number of CDs sold in the U.S. fell 19% in 2007 from the previous year while sales of digital songs jumped 45%, Nielsen SoundScan said.
The number of people buying music legally from online music stores jumped 21% to 29 million last year from 24 million in 2006, according to the study by NPD Group, a market research firm in Port Washington, N.Y.
NPD declined to release figures on individual retailers' sales or their market shares, so it is impossible to know how close iTunes sales are to Wal-Mart's. The NPD market ranking of music retailers is based on a study of the music habits of Americans 13 and older over the last week.
The report, which involved 5,000 people who answered questions online, highlighted a generational split. The increase in legal online sales was driven by people 36 to 50, the report said, giving the music industry an opportunity to target these customers by tapping into its older catalogs.
That's not to say iTunes is not popular with the younger set. Mallory Portillo, 24, an executive assistant in Santa Monica, said she hadn't bought a CD in five years, but typically spent more than $100 a month buying music online. She will turn to illegal music sharing sites only if she can't find new releases or more obscure music on iTunes, she said.
Buying online saves her the step of having to load a CD onto her laptop so that she can then transfer the files to her iPod.
Her most recent purchase came two days ago, when she spent $19.99 on iTunes for Michael Jackson's 25th anniversary edition of "Thriller."
"Hopefully it doesn't come back to haunt me one day that my 'Thriller' CD is on my computer and therefore not a collector's item," she said.
The increase in online spending didn't offset the revenue lost from the drop in CD sales and from illegal downloading. Last year, about 1 million consumers stopped buying CDs, according to NPD.
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2 comments:
I didn't like to collect CDs too. But after I became a fan of Kumi Koda, I started to collect her CDs. Teenagers nowadays don't like to collect CDs is probably because of their prices. In H.K.'s music industry, they prefer to release an album CD - which can contain more songs - than a single CD.
However, a CD like that is usually not cheap. For teenage, they couldn't be able to afford a CD like that.
I think H.K. should follow Japan's method, which often release singles - which usually contains 2 to 3 songs. In that case, teenage could be able to afford that.
Though Japanese singers do release album sometimes, but it does give time for teenage to save money to pay for it.
That's also the reason why I started to collect Koda's CDs.
Japanese Single CD reference price: $45-65
Japanese Album CD reference price: $130-210
You're right, Leo. Teenagers are not bothered about buying CDs anymore. On one occasion in the UK, the top management of a big music company asked a bunch of teenagers to go to their company and be questioned about their music listening habit. After they had finished, the bosses asked to teenagers to pick the CDs that they like free of charge. None of them were interested in taking any. The bosses knew at that time that they are really "dying".
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