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Wayne Rosso’s take on NPD Report Examining the Continued Decline of CD Sales

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With the release of The NPD Groups report focusing on the continued CD Sales Declines in 2008, TMV thought it apt to get industry stalwart Wayne Rosso’s comments . So without further ado:

According to The NPD Group, a leader in market research for the entertainment industry, the number of Internet users paying for digital music increased by just over 8 million in 2008 to 36 million Internet users. Purchases of online digital music downloads increased by 29 percent since last year; they now account for 33 percent of all music tracks purchased in the U.S. NPD’s Digital Music Study, an annual tracking study covering the music industry, also revealed that there were nearly 17 million fewer CD buyers in 2008 compared to the prior year.

The decline in CD buyers cuts across all demographic groups, but was particularly focused on teens and consumers age 50 and older. “Rising incidence of paid downloads is a positive development for the industry, but not all lost CD buyers are turning to digital music,” said Russ Crupnick, entertainment industry analyst for The NPD Group.

NPD also reported that there were 13 million fewer music buyers in the U.S. last year, compared to the prior year. The decline in music purchasing was led by a 19 percent drop in CD sales. Only 58 percent of Internet users reported purchasing CDs or digital music downloads last year, versus 65 percent in 2007.

Wayne Rosso: Well, more evidence to affirm theory–nobody gives a fuck about music anymore. If I’ve said it once, I’ve said it a thousand times, music has lost its economic value to consumers but it has not lost its emotional value. People will always listen to music, and, perhaps even enjoy it.

Consumers’ primary reason for not purchasing CDs was that they were spending less on entertainment overall, because of the recession. Consumers were also concerned about the price of CDs, and expressed satisfaction with the collection of titles they already own. Among the reasons consumers cited for preferring digital music over CDs was that they could choose only the songs they wanted to purchase, and could immediately download and listen to their purchases.

Wayne Rosso: Although you’d have to seriously wonder why when you look at the landscape of shit that major labels have produced over the last ten years. And as this NPD study proves, that’s a big part of the problem. Consumers have wised up and don’t want to be ripped off anymore. Back in the day my generation couldn’t wait to buy albums. We thrived on them as they were complete works and rarely was their a bum track on a Beatles, Stones, Van Morrison, Hendrix or CS&N record. Now fans only want the songs they like because there’s so much crap on the album that there’s just no value there anymore. One of the reasons for this, other than a lack of talent, is the actual CD itself. Because the CD could hold over 70 minutes of audio, a lot of these idiots thought that meant that they had to fill the CD to its audio capacity. The result is a mountain of poop that no one wants, ergo no one buys the CD. They want the hits only

According to NPD, there is evidence that music listening is increasing. For example awareness and usage of Pandora, a leading online radio station, doubled year over year to 18 percent of Internet users; one-third of those who were aware of Pandora report using the service. Similarly, the percentage of consumers claiming to listen to music on social networks climbed from 15 percent in the fourth quarter (Q4) of 2007 to 19 percent in Q4 2008. Nearly half of U.S. teens are engaging with music on social networks, which is an increase from 37 percent a year ago; among college-age Internet users, the percentage increased from 30 percent in 2007 to 41 percent in 2008.

Wayne Rosso: Voila! As the NPD study points out, the increased sales of digital singes (by fewer consumers) nowhere near makes up the difference from the decrease in CD sales. A perfect storm. And by the way, it all comes down to the four executives who run the major labels. They are the guys who are holding on to the rails of the Titanic and not being innovative or visionary enough to change with the times. They’re way behind the curve.

“The trends we’re seeing in our consumer tracking studies are evidence of the continued transformation of the music industry,” said Crupnick. “Just as music piracy and the advent of digital music ended the primacy of the CD, we are beginning to see new forms of listening challenge the practice of paying for music. The music industry now has to redouble efforts to intercept and engage these listeners, so they can create revenue through upselling music, videos, concert tickets, and related merchandise.”

Wayne Rosso: The sad thing is that there are solutions, and meaningful ones. But these guys just can’t, or won’t, entertain them. Plus they’re so greedy and desperate for cash that they suck capital out of the market without a care about growing and nuturing the space. The industry has no one to blame but itself. Not me, nor Sean Fanning, nor Michael Robertson–you name it. After all, there now universally agreed upon biggest fuck up in the history of the music industry was the choice to sue Napster instead of joining Thomas Middlehoff to revolutionize the business model. I guarantee that they wish they had a do over on that one! Too late now.

Data note: Information was derived from the annual NPD Digital Music Study surveys of U.S. consumers. Data was based on a sample of more than 4,000 consumers, and results were balanced to reflect the U.S. Internet population (age 13 and older). Pandora trends source from NPD’s Quarterly Digital Music Monitor. To view the report click here: http://www.businesswire.com/portal/site/home/permalink/?ndmViewId=news_view&newsId=20090317005425&newsLang=en

The view expressed above are those of Wayne Rosso and do not necessarily outline the views of TMV or its staff.

Author

  • Wayne Rosso

    Wayne Rosso has worked in music and technology for decades. He has worked with such artists as Aerosmith, Bee Gees, Crosby, Stills & Nash, Public Image LTD., Beach Boys, Phillip Glass, Fkeetwood Mac, Rick James, New Kids on the Block, Slash, Evanescence and scores of others.

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