CDs Purchases Down, Video Games Help Sales

Sales of physical CDs continued to decline in the third quarter while digital download sales saw a small uptick, according to data from NPD Group. Artists who participated in music-based video games, meanwhile, also saw a bump in album sales.
The number of CDs sold during the third quarter dropped 19 percent from the same period last year, leading to a 2 percent decline in overall music sales.
About 34 percent of teenagers abandoned CDs, while 36 percent of buyers aged 26 to 35 did the same. CD sales only saw about a 10 percent decline among those 36 and older.
Digital downloads from online stores like iTunes and AmazonMP3, however, were up about 2 percent from last year, while legal music download volumes increased 29 percent during the quarter. About 15 percent of Internet users get their music from online music stores, NPD said.
"Alternative distribution deals in mobile and social networking are important ways for the music industry to fill the gap left by the decline in traditional revenue streams," said Russ Crupnick, NPD's entertainment industry analyst.
The popularity of music-based video games like Guitar Hero and Rock Band helped increase album sales for the artists featured in the games. About 22 percent of overall music buyers and 35 percent of those who are younger than 35 said they play these games and were inspired to purchase the music after playing.
"Year-to-date through November, the music and dance genre was the best- selling genre in video games, representing 16 percent of total software sales for the year," NPD video games analyst Anita Frazier said in a statement.
"Even though gaming competes with music for the consumer's entertainment wallet share, music-related games are evolving into an important source for music discovery that can have positive revenue implications for the recording industry," Crupnick said.
PC Mag Dec 08