After the CD market flat lined, the music industry turned to digital music sales to replace their primary source of revenue. At first this went beautifully, with individual song sales growing 27% in 2008. Much to the dismay of the industry, however, sales were down to 8% in 2009, and a mere 1% this past year. The slowing digital music market is a result of free, legal ways to listen to music on the web.
Eric Garland, the chief executive of Big Champagne, a digital music consulting firm, says the change suggests another shift in the market- one leading to free and legal alternative music sources like YouTube and Vevo.
“What’s changed is that people are listening to vastly more free music without breaking the rules,” he said. “that can have a cannibalization effect.”
The decline in the market and the increased price of top-selling songs on the iTunes store occurred simultaneously. Previously, the majority of digital music sales came from that online store. Now, with the price upped 30%, from 99 cents to $1.29, the situation has changed once again.
“The vast majority of the top 200 digital tracks are now $1.29,” explains David Bakula, a Nielsen music analyst. “So while sales of singles are flat, their revenue is absolutely going up.”
The increase in price for singles has boosted the $9.99 album market, upping digital album sales 13% last year.
Tags: Brad Powers, CD Market, Digital Music Industry, Music Industry
Posted in Brad Powers, Marketing, Music Industry | |
