CD Sales Plummet 15%; Digital Sales Gain 45%

Been meaning to get to this for a few days:

"U.S. album sales plunged 15% last year from 2006, as the recording industry marked another weak year of sales despite a 45% surge in the sale of digital tracks.

A total of 500.5 million albums were purchased as CDs, cassettes, LPs and other formats last year, down from 588 million in 2006, said Nielsen SoundScan, which tracks point-of-purchase sales.

The shortfall in album sales drops to 9.5% when sales of digital singles are counted as 10-track equivalent albums. The number of digital tracks sold jumped 45% to 844.2 million; digital album sales accounted for 10% of total album purchases.

For the first time since SoundScan started tracking genre sales, all 12 genres dropped, with rap down 30% and country more than 16%. Overall music purchases, including albums, singles, digital tracks and music videos, rose to 1.35 billion units, up 14% from 2006."

Rap down 30%?

No surprise, there. Rap peaked with the Beastie Boys Paul’s Boutique, and has been downhill ever since . . .

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Source:
Album Sales Drop Despite Digital’s Rise
Associated Press
January 4, 2008; Page B5
http://online.wsj.com/article/SB119941157827866649.html

I particularly like the way Variety spun it last year:

Digital sales boost music industry
Album sales drop yet again
PHIL GALLO 
Variety Thurs., Jan. 4, 2007, 9:25am PT    http://www.variety.com/article/VR1117956655.html?categoryid=16&cs=1

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Game Over in Blu-Ray HD contest?

I’ve mentioned the Blu Ray/HD quandry in the past, but it seems the fight is drawing to its conclusion. In both the US and Europe, Blu-ray discs are significantly outselling HD DVDs.

But its this MacRumors chart (below) that pretty much sums up the battle:

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Warner_300

Its hard to see how HD has a shot.

Now the question becomes how fast the prices drop on both the Blu Ray players and movies, but for now, I am sticking with an upconvert Sony for the big TV.


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UPDATE: January 8, 2008 8:21pm

Why would prices go down?

As we previously discussed, I suspect many consumers have been on the sidelines awaiting the winner of the format war between Blu-Ray and HD.

As that fades away, the total number of purchases of the winner — Blu Ray — will go up significantly.

Thus, economies of scale, mass adaptation, and desires for deep market penetration will drive prices lower.

As to the monopoly issue — I doubt its an issue. 1) These are video playback toys, not an essential product or service; and B)  There is still legit competition from ordinary DVD players (fer cryin out loud, you can still buy VCRs for $29).   

My apologies for failing to explain the intermediate steps in my thinking  . . .

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