Peter Kafka

Recent Posts by Peter Kafka

Going, Going, Not Yet Gone: CD Sales Drop Accelerating

I’m pretty sure I haven’t bought a CD in 2008, and I don’t know anyone else who has, either. Which is why retailers like Wal-Mart (WMT) and Best Buy (BBY) are devoting less and less space to the discs, which means sales are dropping faster and faster. Here’s an update from Pali Research’s Rich Greenfield:

The first four weeks of Q4 2008 have seen CD sales fall about 23% in total (down 26% excluding last week’s AC/DC exclusive that did not benefit the major record labels, nor retailers beyond Wal Mart), compared to the 16%-18% declines experienced during the first three quarters of 2008 and last year’s full-year decline of 19%.”

The accelerating rate of decline for CDs combined with the slowing growth of digital unit sales has resulted in Q4 total unit sales declining 11.6% compared to the 5%-7% declines experienced in Q1-Q3 2008 and is similar to the 11.3% decline experienced in Q4 2007.”

Those are the kinds of stats that make it easy for even the most slothful armchair analysts to declare the CD dead. And they’ll be right–one day.

Even after CD sales shrink by double-digits again this year, it’s going to remain a big business. Last year the music labels shipped some $7.4 billion worth of discs in the U.S. alone. Question. Who is buying these things?

[Image Credit: Neil Rickards]

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