Rich Fiscus
26 Feb 2008 23:17
According to data from the NPD Group, after last year's increase in legal online music sales iTunes has become the number two music retailer in the country. During 2007 only Wal-Mart outperformed the online store.
"The continued growth in legal download sites is encouraging, yet the industry struggles to improve the value of each digital customer," said NPD analyst Russ Crupnick in a statement. "With so many baby boomers and gen-Xers entering the market, there are certainly opportunities to sell more digital albums, promote older catalog titles, or create bundles that will raise revenues. In the near term that’s going to be the best means available to narrow the gap on dwindling CD revenues."
Unfortunately the news wasn't as good for labels as it was for Apple. The increase download revenue didn't offset the continuing decline in CD sales. No doubt part of the problem is that downloads are typically sold one or two songs at a time, versus an entire CD. According to NPD, around a million people stopped buying CDs last year.