Digital music sales rise, CDs struggle to keep up

By Sarah Falson

SYDNEY: Sales of CD singles have plummeted 41 per cent as people download more songs from the internet, however the CD album market is remaining afloat with a boost in volume sales during 2006.

Figures from the Australian Recording Industry Association show that retail outlets, like JB Hi-Fi, sold 7.9 per cent more CD albums in 2006 than the year before, up to 49 million units, largely due to their discount prices.

In the profit stakes however, CD album value dropped 5.1 per cent to $421.9 million in 2006, showing that the CD industry is losing out to its growing digital rivals, including Apple’s iTunes.

Digital music sales last year increased a huge 251 per cent in value, from $7.9 million to $27.8 million, while unit sales (in terms of tracks sold) grew 320 per cent from 4.9 million to 20.9 million – and this includes only legal downloads.

Cassette and vinyl albums and singles took a beating, with cassette sales dropping 56.9 per cent in value and vinyl 59.3 per cent in 2006.

CD album retailers did a good job of retaining customers last year, but if a prediction by Enders Analysis market research firm is correct, then by 2009 global CD sales will be a mere half of what they were in 1997.

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