RSSAnalyst: Music CDs will give way to digital downloads by 2012
By Jacqueline Emigh | Published February 19, 2008, 3:37 PM
HD DVD isn't the only optical disc format that's heading into decline right now. Audio-formatted CDs will find themselves one-upped by digital music by 2012, according to a Forrester report issued today.
Digital music will soon produce more sales than music CDs, says today's new Forrester Research report, which yields similar numbers to those released by JupiterMedia last fall. But where Jupiter analyst Mark Best thinks there'll always be some market for CDs, Forrester's James L. McQuivey plays up the roles of DRM-free music and social networks in digital music downloads.
Similar to the findings of a study released last fall by Jupitermedia, the Forrester report finds that the yearly rise in downloaded tunes will not make up for a steady slide in CD sales.
Driven by MP3 player adoption, DRM-free music, and social networking, digital music sales will inch upward at at compound annual growth rate (CAGR) rate of 23% over the next five years, reaching $4.8 billion in 2012, according to James L. McQuivey, a VP and principal analyst at Forrester.
In the same year, CD sales will slip to an abysmal $3.8 billion, said McQuivey, terming this phenomenon "the end of the music industry as we know it."
With the current move toward the elimination of DRM, profile spaces on MySpace and other social networks are metamorphosing into online music stores, centering around the preferences of their respective individual members.
All four of the biggest music labels are already starting shedding the baggage of DRM, the Forrester report observes. And as previously reported in BetaNews, Microsoft's Zune service, Apple's iTunes, and Amazon.com have all jumped on the DRM-free bandwagon.
As for MP3 players, Forrester's McQuivey points out that the average device is only 57% full, further suggesting that many of these players are currently under-utilized.
In another intriguing result, the analyst predicted that, in the future, most MP3 players will be sold into households that already have at least one of these devices.
In looking at Jupitermedia's research in this area, which yielded somewhat similar numbers, Jupiter analyst Mark Best told BetaNews that CDs "will never really go away," despite the projected massive drop in music CD sales.
CDs will continue to be popular among adults who grew up with CDs, record albums, or tapes, said Best.
For his part, on the other hand, McQuivey predicts that music labels might turn to other sources of revenue -- such as music-enabled games -- to help close the impending financial chasm.
I haven't bought any music period in years. I personally am perfectly happy just listening to the radio.
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My employer's banned MP3 players *and* blocked online music via firewall & policy. On top of that, radio reception in the building is virtually non-existent. If I want to be able to listen to anything at work, I have to bring CDs in...
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I think CD and DVD will be the standard delivery method for high-quality audio for quite a while. There are still huge areas of the country (and world) that do not have access to broadband... and a good percentage that do have access will probably violate their TOS agreements if they download 600+MB of CD-Quality Audio!
Will digital downloads continue to grow? Absolutely... but audiophiles do not want compressed MP3 crap. Personally I'll never pay for anything in a degraded format. I might consider paying for downloads if they offer lossless FLAC format.
What about DVD Audio? That's even a much bigger download! 4 to 8 GB maybe? The ISP's and Telco's will meltdown.
If the RIAA and MPAA put their efforts into building the infrastructure (or pressuring others to do so) and making broadband available to everyone they might be able to successfully employ album downloads as a business model (saving manufacturing, warehousing and delivery costs along the way.) Instead they whine, peddle an inferior quality product one song at a time and pine for the 'good old days.'
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Yep and by that time hopefully the RIAA will be extinct and Artists will sell their content directly to the people in whatever form they so choose...
Even then. lets face it. How much music does a person buy anymore, or even listen too that is not already considered an oldie? Seriously I have not heard anything new in at least a decade that would be worth a so called platinum album... Nor worth the purchase of their content as an album. A few 1 hit wonders ok. But then again thats what iTunes is for... IMHO. Everything else is ripped from my CD collection from the 80's & 90s. The rest. well I wouldn't have bought it anyways. If it would not be from radio FM, I doubt I would ever hear most of it at all...
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"How much music does a person buy anymore, or even listen too that is not already considered an oldie?"
This may be true for the listeners of Pop, Top-40, Rap and AOR radio... but not for the admittedly smaller markets like Classical, Jazz and niche markets like Progressive Rock or even Metal. There's still lots of folks out there that enjoy the 'album experience' because their artists are worth listening to. They aren't cookie cutter radio fodder or trying to score a hit single.
I try not to listen to my local AOR station because I get sick of hearing the same songs over and over and over again. Seek out other genres and you WILL find artists and albums that are worthy of Platinum Album status... artists that are talented songwriters and musicians... not just Record Company finger puppets.
I'm in agreement with you... 99% of what's on FM radio is tired and uninspiring... and I'd love to see the day when the Artist is fairly compensated for their creativity without the exploitation of the RIAA.
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CDs will be a round for a long time because of a couple obvious reasons:
1) Not every vehicle has a built-in MP3 player or Ipod connector, but the vast majority have CD players, and it's pretty hard to find one that isn't equipped with one standard off the showroom floor.
2) CD is about as ubiquitous as you can get for a music playback medium. Heck, you can still get LP's and tapes, and they've been "obsolete" for how long?
"CD sales will slip to an abysmal $3.8 billion" .... That just blows my mind that 3.8 billion dollars can be called such an inappropriate adjective.
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1. People burn to CD from digital.
2. niche markets.
3.8 billion is truly abyssmal. The movie Titanic has probably made more money internationally. That is smaller than the dry-cleaning industry and pretty much any other industry I can think of. Even alfalfa is a larger industry.
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"CD sales will slip to an abysmal $3.8 billion"
The writer of this article obviously doesn't know the meaning of the word "abysmal".
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2012?? So that's what the mayan calendar was trying to warn us all about!:P
All I want is a format for music that will give me the highest audiophile quality possible. I'm still waiting for that.
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yeap
that's why the mayan calendar is shaped as a CD . . .
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I have been saying this for at least 3+ years! Don't get me wrong, I still love having certain Artists / CD's in my collection, but I converted all of my CD's into MP3's and for the most part, they are simply taking up some space.
All we have to do now is teach people to do regular backups of their Music Library and all will be good!
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"All we have to do now is teach people to do regular backups of their Music Library and all will be good! "
Good luck with that..
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long live the 8-Track!!
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