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More bleak news for the music industry

From the news:

NPD stated that around one million consumers decided to stop buying CDs last year, with teens leading the trend. According to estimation, around 48% of teens in the U.S. bought no CDs last year, 10% more than one year before (38%). If the trend grows at this pace (if not more rapidly), CDs and US teens will have nothing to do with each other by 2013. Talk about 13 and bad luck

In addition, teens are also more and more inclined to download music files via P2P, with such activities increasing during the past year.

Last but not least, the worst news for the music industry execs is that the overall music spending went down 10%. The most likely explanation would be linked to digital downloads: with customers now able to buy a single track instead of an entire album, less and less people are inclined to spend more.

2 Comments;
  • http://www.buzzbishop.com/blog bz

    iTunes is now, solidly, the #2 MUSIC retailer behind WalMart.
    How can the record companies complain of losing money when the costs for their distribution model a) approach zero b) consumers like it that way.
    It speaks not to piracy, but more to how the internet is letting people discover and share new music on their own, without the help of radio.
    Look at Colbie Caillat, Sarah Bareilles – they’re stars because of the internet, not because of an A&R agent.
    Music companies, like radio stations, have no one to blame for themselves for not harnessing the power of new media.
    iTunes proves that if you do it properly, people will pay.

  • George

    I was at a seminar where I heard that the music industry expects this trend to continue. The public has gotten used to free or cheap music. Retail will continue to shink the size of music departments in stores. The industry’s only solution to the loss of consumer revenue is to go after revenue from other, more stable sources. Such as broadcasters. Thus the performance royalty.
    My only question is what happens to music if the main money doesn’t come from fans or consumers, but rather those evil broadcasting corporations they’re currently campaigning against? What will their new revenue source do to music and creativity? Will it mean that the only music getting made is that which will get airplay, thus provide revenue? Perhaps some of those who are campaigning for this royalty (such as the creative community) should consider this. Because as we all know, there is no such thing as a free lunch.
    I also wonder how broadcasters, who have been cutting personnel and replacing them with free music, will react when the cost of music is about the same as their former employees.

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MRM President Mark Ramsey has worked with innumerable television and radio broadcasters over his career, including all the biggest names, from Clear Channel, CBS, Bonneville, Sirius XM...

Mark Ramsey