Peter Kafka

Recent Posts by Peter Kafka

Not News: CD Buyers Disappearing Daily. Might Be News: Music Buyers Disappearing, Too

victrolaCommon sense tells you that the CD is a vanishing artifact. So would a trip to the music section of your local Best Buy (BBE), Target (TGT) or Wal-Mart (WMT)–or an actual music store, if you could find one.

But just in case you weren’t convinced, here’s some new data from NPD Group:

  • CD sales dropped by 19 percent last year.
  • The number of U.S. CD buyers  dropped by 17 million last year.
  • The number of music buyers dropped by 13 million last year.

Only the last number is noteworthy. Because while NPD says that digital music downloads increased by 29 percent in the last year–good for Apple (APPL)–the research firm also notes that many Americans have simply stopped paying for recorded music, period.

Up until last fall, music optimists would argue that this was OK, because people were more engaged with music than ever. Semi-true cliche: The music labels are in trouble. The music business is doing just fine.

And indeed, NPD throws out a series of stats which show that more people are listening to free music provided by the likes of Pandora, iMeem and News Corp.’s (NWS) MySpace Music. But all of the sites that are providing free music are having a very hard time figuring out how to make a business out of it. It’s quite likely that we’ll see some of them fold or sell out in the next few months. Stay tuned.

Note: News Corp. owns Dow Jones, which owns this site.

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I think the NSA has a job to do and we need the NSA. But as (physicist) Robert Oppenheimer said, “When you see something that is technically sweet, you go ahead and do it and argue about what to do about it only after you’ve had your technical success. That is the way it was with the atomic bomb.”

— Phil Zimmerman, PGP inventor and Silent Circle co-founder, in an interview with Om Malik