Are digital music downloads already heading the way of the CD?

By on December 16, 2013, 11:15 AM
download, music, streaming, cd, music sales, digital downloads, billboard

Don’t look now but it seems as though digital downloads may have already reached their peak. According to a new report from Billboard, 2012 may ultimately go down in history as the most lucrative digital download year as streaming services such as iTunes Radio, Rhapsody and Spotify will likely continue to gain in popularity and perhaps one day replace downloads completely.

Digital purchases are down across the board thus far this year and with just a couple of weeks left before we ring in the New Year, things will likely stay that way. Specifically, individual track sales are down 4.4 percent through November 24 according to Nielsen SoundScan. Track-equivalent albums are down 2.1 percent while total purchases of tracks and albums are four percent lower compared to last year.

As NPD Group analyst Russ Crupnick points out, existing weakness in catalog sales mimics what happened with CDs. Roughly eight to nine years ago, people started showing apathy about CD purchases and would only add to their collection if something really wowed them.

It’s not as if the shift was a big surprise to those in the industry. Sony Music Entertainment chairman Doug Morris told the New York Times that buying habits of music lovers are changing. Instead of buying physical records or even digital downloads, consumers are starting to prefer music on demand options from streaming services.

There’s no clear answer as to what the future holds in terms of streaming services and whether or not the business model will be sustainable. Multiple services boast millions of users each but only a fraction of them are paid subscribers. Companies will ultimately need to find a way to generate more paying subscribers or increase advertising revenue from free users, one would have to guess.




User Comments: 29

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wastedkill said:

I use spotify now I have never and never will buy music I find it much easier to use something like spotify.

treeski treeski said:

It's not surprising at all. I haven't picked up a streaming subscription yet (although to be honest, I never bought any digital music), but I'm sure I will sometime next year. I haven't spent any time researching the various subscriptions, but I'll definitely need sometime that lets you download songs for offline use (can't be eating up my mobile plan).

3 people like this | TomSEA TomSEA, TechSpot Chancellor, said:

No surprise in this instant gratification society we've become, but I still prefer having my own music selection. I don't like the quality of streaming music (128 kbps or worse), nor do I want to fuss with spending a bunch of time customizing the stream until it finally plays what I want to hear. And of course there are the interruptions and commercials unless I pay. Which is understandable, but again - I'd rather pay to have the music to begin with and set up my own music lists on my various mp3 players.

wastedkill said:

It's not surprising at all. I haven't picked up a streaming subscription yet (although to be honest, I never bought any digital music), but I'm sure I will sometime next year. I haven't spent any time researching the various subscriptions, but I'll definitely need sometime that lets you download songs for offline use (can't be eating up my mobile plan).

Spotify lets you do that which I love as I have offline mode on my pc and phone just incase internet goes out xD and it only costs £9.99 per month which is cheap if you think about it I highly recommend going with spotify!

m4a4 m4a4 said:

I have too specific of music tastes, so streaming doesn't work for me. I would rather use the radio as background music if need be...

Skidmarksdeluxe Skidmarksdeluxe said:

I have too specific of music tastes, so streaming doesn't work for me. I would rather use the radio as background music if need be...

Me too. I've haven't bought any music since the early 2000's. If I like & want a certain song I'll simply pirate it. I can't justify wasting $9.99 a month on something like Spotify which I'll never use and would never support Apple in any way shape or form.

TomSEA TomSEA, TechSpot Chancellor, said:

I have too specific of music tastes, so streaming doesn't work for me. I would rather use the radio as background music if need be...

Me too. I've haven't bought any music since the early 2000's. If I like & want a certain song I'll simply pirate it. I can't justify wasting $9.99 a month on something like Spotify which I'll never use and would never support Apple in any way shape or form.

Nice. You can't even bother to pay .99 to Amazon or some other online retailer to buy a song. You still have to steal it....

GeforcerFX GeforcerFX said:

This was the whole reason I went with Zune back in high school, for $100 a year I could listen to thousands of songs (and keep 10 a month) as long as I was paying my subscription, it was organized on my computer and was easy to transfer to my Zune. I had people amazed by the fact I had 10,000 songs but owned like 250 of them. I really enjoy what these new streaming services can do, I have even been tempted to do Xbox music steaming service again, simply because I enjoyed it so much back in the day and its very streamlined just like back in the day.

Guest said:

Xbox music that comes with Windows 8.1 (and I think it may also work with Windows 8 through an app update) is what I use. Most of the music I like I can stream for free, so I just search for a particular album I like, add it to my collection and voila, I'm streaming it. Only bad thing is there's advertisements every few songs, but I can live with it since it's free streaming.

1 person liked this | Tekkaraiden Tekkaraiden said:

I have too specific of music tastes, so streaming doesn't work for me. I would rather use the radio as background music if need be...

Me too. I've haven't bought any music since the early 2000's. If I like & want a certain song I'll simply pirate it. I can't justify wasting $9.99 a month on something like Spotify which I'll never use and would never support Apple in any way shape or form.

I'm the opposite, I buy more cd's now than I did 10 years ago. I haven't downloaded a song since the early 2000's.

GeforcerFX GeforcerFX said:

Xbox music that comes with Windows 8.1 (and I think it may also work with Windows 8 through an app update) is what I use. Most of the music I like I can stream for free, so I just search for a particular album I like, add it to my collection and voila, I'm streaming it. Only bad thing is there's advertisements every few songs, but I can live with it since it's free streaming.

you can actually just listen through the internet browser as well (aka windows 7 and vista users) There's apps for android, and iOS, and obviously the newest windows 8, 8.1 devices also have the apps. If you have a music pass ($120 a year) you can actually download and save the music to your PC/Phone/tablet/xbox.

Skidmarksdeluxe Skidmarksdeluxe said:

Nice. You can't even bother to pay .99 to Amazon or some other online retailer to buy a song. You still have to steal it....

In case you don't know it yet, I'm not American, I don't live in America and we don't have access to some of these sites but even if I was & I did .99 is not worth it to me. It costs me more in bank charges & transfers. I'm definitely not interested in yearly subs, I don't listen to music that much that I'd go for it.

Skidmarksdeluxe Skidmarksdeluxe said:

you can actually just listen through the internet browser as well (aka windows 7 and vista users) There's apps for android, and iOS, and obviously the newest windows 8, 8.1 devices also have the apps. If you have a music pass ($120 a year) you can actually download and save the music to your PC/Phone/tablet/xbox.

Yeah I know but I don't listen to $120 worth of music a year. Believe it or not, buying a physical CD is far more economical than subscribing to one of these services here in Africa. It's probably why we don't have services like that here.

Skidmarksdeluxe Skidmarksdeluxe said:

I'm the opposite, I buy more cd's now than I did 10 years ago. I haven't downloaded a song since the early 2000's.

I'm exactly the same, I'd rather buy the physical disk than pirate but unfortunately it's not always possible to get what you want here (for my taste in music).

TitoBXNY TitoBXNY said:

I am very satisfied with Spotify and wish it came out sooner. I created playlists of music that even my parents listened to in the 50's and 60's. The quality is perfectly fine and I listen to it on my phone, tablet and pc. No need to purchase anything. While on the subject, NETFLIX has become a favorite as well.

St1ckM4n St1ckM4n said:

Wheres 320kbps stream? What will happen when 4K becomes the norm?

1 person liked this | Chuck Cortes Chuck Cortes said:

I love the people who scream "you're stealing". Just to let you all on a little secret I have rarely ever purchased a song in my life and I go back to when music was on record and cassettes. I use to listen to the radio all the time (back when commercials between songs were rare) and I always had a tape ready to go at any time and record. then came CDs which I then proceeded to record to CDs.

I don't care if you think I am stealing, this has been a common thing for as far back as recording has been done on cassettes and no one ever said crap about it back then. Now all of a sudden because the quality is better today and its easier to get now all of a sudden everyone cries "poor artist". Last I check no artist is going broke because of pirating, they don't know how to manage their money, that's their problem.

As for the article, I find it funny that it doesn't mention Pandora which is one of the most famous ones and instead mentioned iTunes radio which just recently started and didn't even hint at Google's All Access. How ironic.

9Nails, TechSpot Paladin, said:

As for the article, I find it funny that it doesn't mention Pandora which is one of the most famous ones and instead mentioned iTunes radio which just recently started and didn't even hint at Google's All Access. How ironic.

+1

wastedkill said:

As for the article, I find it funny that it doesn't mention Pandora which is one of the most famous ones and instead mentioned iTunes radio which just recently started and didn't even hint at Google's All Access. How ironic.

Probably because Pandora is US only hence why its not exactly number 1... Lets not forget spotify has 20million songs where Pandora has a meagre 900k... massive difference in music catalogue.

[link]

1 person liked this | Terrax said:

Did they ever think it could be a down year because the music was crap this year? Just a little food for thought.

EClyde EClyde said:

You can call it a music service but it's really just the radio. Music is nice but way overrated. How many times can someone listen to anything? I prefer silence and my thoughts any day. It wasn't always like that though. Whether is a 45, 8Track, album, CD or digital download..it doesn't matter something will replace something. Wish I still had my 6 transistor radio, though.

EClyde EClyde said:

Did they ever think it could be a down year because the music was crap this year? Just a little food for thought.

Music is always crap if you don't like it. Maybe expand your listening to include the 30's or some stinging R&B. Don't blame someone else for your limited listening habits

ddg4005 ddg4005 said:

I've purchased more CDs in the last two years after streaming music than I did prior. If anything, streaming services may help boost CD sales.

wastedkill said:

Music is always crap if you don't like it. Maybe expand your listening to include the 30's or some stinging R&B. Don't blame someone else for your limited listening habits

Ye right because the song Nicki Minaj - stupid hoe is good music.. its hard to find good music specially when there is a lot of terrible music out and coming out right now its not because we have limited listening habits like you say its because we got people who can only sing with autotune.

If you require autotune like most singers these days then you really should think career choices, I certainly wouldn't like someone who cant do finances to handle my finances same principle just different situation.

St1ckM4n St1ckM4n said:

Streaming sucks because of the quality. CD sucks because of the huge physical format and storage required.

Download is the way to go for most people. But, we need to cut the shitty 256kbps max bitrate available in iTunes, and we need to start charging realistic rates for albums and songs.

its hard to find good music specially when there is a lot of terrible music out and coming out right now

You're assuming American Pop Music is the only new music coming out. This is what @EClyde meant - start listening to some other genre's, or even older music.

wastedkill said:

You're assuming American Pop Music is the only new music coming out. This is what @EClyde meant - start listening to some other genre's, or even older music.

Who dont just assume stuff just because your "the top dog" calm down man I meant all music... 20% of all new music is actually good but I guess you wouldn't know that being into screamo only music an all.

St1ckM4n St1ckM4n said:

Lol what? I'm pretty calm, and definitely not into screamo.

I was just saying that there's a ton of good music coming out, just that it's probably not in the pop hits category.

1 person liked this | Railman said:

Lol what? I'm pretty calm, and definitely not into screamo.

I was just saying that there's a ton of good music coming out, just that it's probably not in the pop hits category.

Have to agree with you. There is certainly a great deal of good music out there. Problem is that it gets so little media attention. I blame the X Factor and other crap TV talent shows. But commercial radio is another reason due to their unimaginative playlists.

djred24 djred24 said:

I have too specific of music tastes, so streaming doesn't work for me. I would rather use the radio as background music if need be...

Me too. I've haven't bought any music since the early 2000's. If I like & want a certain song I'll simply pirate it. I can't justify wasting $9.99 a month on something like Spotify which I'll never use and would never support Apple in any way shape or form.

Nice. You can't even bother to pay .99 to Amazon or some other online retailer to buy a song. You still have to steal it....

I agree, for years I just D/L Beatport of Torrent sites. My issue is you don't get Art work cover in Serato, The way songs are numbered in your crate list was hard to manage. Plus $1 a song or compilation of various artist for $10 gives you 40 + tracks.. Sorry as soon as I got an iPhone I appreciate supporting and finding some of my Vinyl, to have digital ,with out recording from my Vinyl. so I can just mix Mp3 as every other Dj mostly use.

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