CD sales in the U.S. down 20% - Blame the Internet

Sales of physical CD's in the United States plummeted 20% in the first three months of 2007, compared to the same period in 2006, as online downloading of songs continued to take over.

89 million CD’s were sold from the start of the year through March 18 as compared with 112 million CD’s sold during the same period in 2006, according to Nielsen SoundScan report released Wednesday. Sales of individual songs in digital format on the Internet rose from 242 million tracks during those months last year to 288 million this year, according to SoundScan.

Consumers are sending a clear message to artists that "while you may have put a lot of thought into the sequence of the album, I only like these three songs," said industry analyst Michael McGuire of Gartner Research.

"It comes back to consumers being in complete control of their media experience, and that is not going backwards," Gartner told AFP. "This is a tough business being a record label because they have to find new sources of revenue," he added.

In recent weeks, the music industry has posted some of the weakest sales it has ever recorded. Even despite falling CD prices and massive marketing, this year has already seen the two lowest-selling #1 albums in history.

Because of the Internet, consumers have more ways to obtain music now than they did a decade ago, when walking into a store was the only option. The increasing popularity of digital music downloads on the Internet is slowly taking over CD sales and leaving record companies with nothing to stand on if they fail to adapt to digital distribution.

[Image via Flickr / Squirmelia]