Paid Downloads On The Rise, But CD Still Rules

According to The NPD Group, a leading market research company, while CDs remain the most popular format for paid music purchases, digital music sales are making up an ever-greater share of U.S. music sales. CDs comprised 65 percent of all music sold in the first half of 2009 compared to paid digital downloads, which comprised 35 percent. By comparison, paid digital music downloads comprised just 20 percent of sales in 2007 – growing to 30 percent of the music market last year.

Russ Crupnick, NPD VP of entertainment industry analysis says, “With digital music sales growing at 15 to 20 percent, and CDs falling by an equal proportion, digital music sales will nearly equal CD sales by the end of 2010.”

According to NPD MusicWatch, when it comes to the unit-sales volume of music sold at retail – including paid digital music downloads and CDs – Apple iTunes leads in the U.S. with 25 percent of music units sold, which is up from 21 percent in 2008 and 14 percent in 2007. Walmart (including Walmart.com) remains in second position with 14 percent of music volume sold. Best Buy ranked third.

iTunes also continued to solidify its lead in the digital music arena, as consumer downloads from iTunes comprised 69 percent of the digital music market in the first half of 2009, followed by AmazonMP3 at 8 percent.

Walmart leads all sellers of CDs with a 20 percent share of the physical music market, followed by Best Buy at 16 percent, and Target and Amazon tied at 10 percent each.