August 18th, 2009

CDs still sell: Who are these people?!?

Posted by Larry Dignan @ 11:30 am

Categories: Apple, Entertainment, Hollywood on Demand

Tags: CD, NPD, Larry Dignan

Apple’s iTunes music juggernaut accounts for 25 percent of music sold. The rub: Sixty-five percent of you are still buying CDs for your music in the first half of 2009, according to research firm NPD.

The big question today: Who are these people still buying CDs? Sam Diaz notes even his dad has gone digital. NPD allays the digerati by noting that digital downloads will represent half of music sales by the end of 2010 (statement, Techmeme). Great, then we’ll all get to ask who is still buying CDs all over again.

So who are these CD lovers?

• They’re the same bunch still subscribing to AOL dial-up.
• They’re the same folks that still like albums.
• They’re the same people that read liner notes.
• They’re also a lot like me once in a while—People that would rather have the source material instead of screwing around with various formats (I also buy from Amazon’s MP3 store).

Among the notable NPD statistics:

• CDs were 65 percent of all music sales with digital downloads accounting for the remainder.
• Apple iTunes represents 25 percent of music units (including digital and CDs) sold.
• Wal-Mart accounts for 14 percent of music volume (digital and CDs).
• For digital music, iTunes had 69 percent of the market followed by Amazon at 8 percent.
• For CDs, Walmart was the big dog with 20 percent of the market followed by Best Buy at 16 percent and Target and Amazon (10 percent each).

My read:

• I doubt that CDs will fall too far below the 50 percent mark largely because it’s easier to port songs in a physical format. Anyone that has tried to use a non-iPod player knows the importance of having a CD lying around.
• Apple’s music domination could attract more regulatory attention in a few years.
• Big box retailers are still an efficient way to move music sales, but they’ll need a digital strategy if CD sales continue to fall.