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NPD: Music CDs, Digital Downloads Remain Popular Gifts

10 Dec, 2012 By: Erik Gruenwedel

Packaged media music and downloads are coveted gifts during the holidays despite burgeoning subscription services

Music CDs and digital downloads gift cards are still sought-after holidays shopping items, despite the rising use of Pandora, Spotify, Rhapsody and other options for streaming music, according to new data from The NPD Group.

This year 12% of U.S. consumers surveyed said music would be on their holiday gift lists, with music gift buyers intending to increase their spending on music by 18% compared with last year, which is the largest spending increase among all the gift categories NPD tracks. The data is based on NPD’s online consumer holiday spending survey panel from Sept. 4 through Sept. 11.

Last year, more than 36% of all music downloads were purchased with a gift card, according to respondents. The percentage of U.S. consumers who listed music on their gift lists was higher than the percentage of consumers who planned on purchasing wallets and other fashion accessories (11%) or jewelry (10%). One quarter of consumers who intend to give music as a gift were between the ages of 18 and 34 — typically the most sought-after consumer demo among marketers.

“The widely held belief that younger music listeners no longer value traditional music-buying formats appears to be moot, at least when it comes to holiday gift giving,” said Russ Crupnick, SVP of industry analysis at NPD. “Music gifting is not just about festively wrapped CDs anymore, now that music consumers can now purchase iTunes, Rhapsody or Spotify gift cards at Target, Walmart and other big-box stores.”

Impulse shopping remains a key driver for sales of CDs and digital downloads. Indeed, 26% of CD purchases were driven by impulse and 16% were motivated by in-store browsing, according to NPD. Walmart shoppers were most likely to purchase music on impulse (32% of Walmart’s CD sales); while 25% of Amazon CD buyers reported they purchased CDs on impulse, and 22% of digital music download purchasers cited “buying on impulse,” as a key purchase driver.

“Whether their music taste is for One Direction or Rod Stewart, consumers know that they can’t go wrong with music as a gift, which is why we continue to see music on holiday gift lists, despite the expanding number of free music-streaming options,” Crupnick said.

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