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Number of CD Buyers Rises, NPD Says

6 Mar, 2012 By: Erik Gruenwedel

The number of consumers buying music CDs increased 2% to 78 million in 2011 — a surprising trend considering the rise in subscription music services such as Pandora, Rhapsody and Spotify, according to new data from The NPD Group.

After years of decline, driven by sharply falling CD sales and maturing digital download market, total music-track sales rose 4% in 2011. Although CD sales dipped, the decline was not nearly as severe as in the past, and the drop was offset by a healthy paid-music download market, according to Port Washington, N.Y.-based NPD.

Indeed, there are nearly twice as many consumers of music CDs than there are of music download services such as Apple iTunes, which celebrates its 10th anniversary in 2013, said Russ Crupnick, SVP of industry analysis at NPD.

“CDs are the gift that keep giving, which proves that even in an increasingly digital age, consumers will respond to quality content and strong perceived value, even if it comes in a physical package,” Crupnick said. “The CD still has a powerful attraction for both older, mainstream consumers who listen in their cars, as well as to super fans who enjoy owning the package and assortment of songs from their favorite artists.”

Meanwhile, the number of paid download buyers increased 14% in 2011 to 45 million customers. Digital buyers also spent more at iTunes Music Store, Amazon MP3 and other digital music stores in 2011; the average annual expenditure for digital music rose 6% in 2011 to $49.

“Despite all of the exciting online radio options, we are still seeing healthy growth in the market for digital-music downloads,” Crupnick said. “This growth is fueled by an increase in mobile devices, and a core base of consumers who want to own the music they listen to, despite all of the emerging radio options.”

Finally, NPD reported that the fastest growing form of music listening was online radio. While listening to CDs and AM/FM radio are by far the most popular ways Americans engage with music, online-radio listening has grown from 29% two years ago to reach 43% of the internet population in 2011.

“As long as consumers want to own digital tracks and continue to have a passion for the physical format and a way to play their CDs, online radio and paid-to-own music will live in harmony,” Crupnick said.

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