Global Music Sales Down 7.6 Percent (September 14, 2004)

Paid or pirated, downloading MP3s from the Internet has changed the way people acquire music, selecting the songs they want, while eschewing the pricey CDs that have 1-2 songs that they want, due to radio exposure, but the rest they don't care to waste their money on.

Global sales of recorded music fell for a fourth consecutive year in 2003, according to figures released Monday by the International Federation of the Phonographic Industry.

The industry body said sales of recorded music in both audio and video formats fell by 7.6 percent in value and by 6.6 percent in units, compared with 2002, and is now valued at $32 billion, on unit sales of 2.7 billion.

The market has declined by $6.2 billion since 1999, a fall of 16.3 percent at constant exchange rates.

The IFPI attributed the decline to three main factors: CD burning and illegal downloading; competition for consumer spending from DVDs and cell phones; and economic uncertainty, particularly in Latin America and Asia.

Also to blame for the decline of CD sales are lack of quality Top 40 singles that are getting extensive airplay on corporate radio stations in America, but more listeners are not selecting music based on what they heard on the radio, instead, using radio's choice of music to influence what they should not be buying, such as endless runs of the same lame song by Britney Spears on KIIS for a half a dozen month runs.

It used to be, prior to Napster taking off, that people hear the song on the radio, then they go to the store and buy it, if they think the overpriced $20 CDs are worth the artist's weight in gold. Nowadays, music fans like myself are no longer purchasing music based on what they hear on the radio because, for example, Clear Channel doesn't bother to play Canadian comedy folk music, for example, instead, showing preference to play teenage-aimed acts with adult themed lyrics that make the elders shake and shudder at the thought that their 14-year-old daughters could be desiring to emulate what Christina Aguliera is singing about.

As illegal MP3 downloading became more popular since 1999, record stores shuttered due to lack of buyers who would pay $20 for a CD with 1-2 songs they like, instead, downloading only the tracks that they like for free.

Nowadays, a dozen RIAA-sanctioned pay download sites where you can get a song download for 99 cents (none will be mentioned in this article) exist for music fans to bypass the traditional brick-and-mortar record stores, which are falling by the wayside year by year. Fast food outlets and soft drinks aimed at teenagers are offering free downloads for people who purchase their food and drinks.

For a year, the Columbia House Record Club has been offering three CDs for the price of one, then four for the price of one, in a way to starve off a customer exodus where sales of their records plummeted while free or cheap MP3 downloads on the Internet exist.

Many record stores are continuing to fight a losing battle. Sales of CDs are down. People prefer to spend $1 on a song download instead of $20 on 12 songs where 11 of them are undesirable to them. Record stores and labels need to collaborate on a CD single format where the visitors to the stores can purchase a CD-single, on a mini CD, with 2-4 songs from the same artist or popular songs from the same label, for $1, definitely no more than $2 a CD. That's 50 cents a song, 50 percent cheaper than a music download. Plus, a CD single, comprised of the Mini CD-Audio disc, CD label, and either a jewel case with CD label or a jacket with a label, can be made for about 15 cents on the wholesale market. The CD stores can take in 15 cents, and the record label has to swallow the whole thing up for 60 cents. That's $1 CD with two songs on it.

Face it, record stores. The cat is out of the bag. Nobody is going to spend $20 on a crappy Alicia Keys album anymore, when they can download one crappy Keys song for $1. That's 12 for $12. The record stores are losing out. They need to regroup and come up with music packaged in a way that people will want to spend $1 or $2 on a few songs, then pay up and walk away.

If the record stores understood what was happening to them in 1999 when Napster first hit the scene, and forced the labels to sell CD singles for cheap, then many of them wouldn't have been converted to Krispy Kreme or Bank Of Your City stores by now.