33% of all music sold in 2008 was digital

According to The NPD Group, the number of Internet users paying for digital music increased by just over 8 mln in 2008 to 36 mln Internet users. Purchases of online digital music downloads increased by 29% since 2007; they now account for 33% of all music tracks. There were nearly 17 mln fewer CD buyers in 2008 compared to 2007. The decline in music purchasing was led by a 19% drop in CD sales. Only 58% of Internet users reported purchasing CDs or digital music downloads 2007, versus 65% in 2007.

Awareness and usage of Pandora, a leading online radio station, doubled YTY to 18% of Internet users; one-third of those who were aware of Pandora report using the service. Share of consumers claiming to listen to music on social networks climbed from 15% in Q4 2007 to 19% in Q4 2008. Nearly half of US teens are engaging with music on social networks, which is an increase from 37% a year ago; among college-age Internet users, the share increased from 30% in 2007 to 41% in 2008.

$3.7 bln of digital music sold in 2008

IFPI reported legal digital global sales in 2008 grew by an estimated 25% to $3.7 bln in trade value, to account for about 20% of the industry’s global recorded music sales, up from 15% in 2007. 95% of the music downloaded in 2008, or more than 40 bln files, was illegal and not paid for.

Top albums of 2008

Rank Title Artist
1 As I Am Alicia Keys
2 Noel Josh Groban
3 Tha Carter III Lil Wayne
4 Long Road Out of Eden Eagles
5 Taylor Swift Taylor Swift
6 Rock N Roll Jesus Kid Rock
7 Viva La Vida or Death and All His Friends Coldplay
8 NOW 26 Various Artists
9 Carnival Ride Carrie Underwood
10 The Ultimate Hits Garth Brooks
Source: Nielsen

Most downloaded songs in 2008

Rank Song Artist
1 Low Flo Rida Featuring T-Pain
2 Bleeding Love Leona Lewis
3 Lollipop Lil Wayne Featuring Static Major
4 I Kissed a Girl Katy Perry
5 Viva La Vida Coldplay
6 Love Song Sara Bareilles
7 Apologize Timbaland Featuring OneRepublic
8 No Air Jordin Sparks Duet With Chris Brown
9 Disturbia Rihanna
10 4 Minutes Madonna Featuring Justin Timberlake
Source: Nielsen

Most listened songs on the radio in 2008

Rank Song Artist Total Listeners
1 No One Alicia Keys 3,084,014,000
2 Low Flo Rida Featuring T-Pain 3,025,670,000
3 Bleeding Love Leona Lewis 2,754,498,000
4 Apologize Timbaland Featuring OneRepublic 2,508,246,000
5 Lollipop Lil Wayne Featuring Static Major 2,365,270,000
6 With You Chris Brown 2,348,062,000
7 Love in this Club Usher Featuring Young Jeezy 2,280,490,000
8 No Air Jordin Sparks Duet With Chris Brown 2,170,133,000
9 Sexy Can I Ray J & Yung Berg 1,926,995,000
10 Take A Bow Rihanna 1,920,855,000
Source: Nielsen

15% of music sold worldwide in 2007 was digital

In 2007, online music distribution represented about 23% of revenue in the US, and about 15% worldwide. As a percentage of total revenue in the US market, physical media (CDs, LPs, DVD-A and so on) have gone from 91% of revenue in 2005 to 77% in 2007. There is also evidence that physical retailers are even reducing the physical floor space dedicated to CDs. Enabling the transition away from retail music CDs toward online distribution is now in sight, given that 77% of U.S. households (a total of 96 mln connections) will have broadband connections by 2012, Gartner reports.

Only 22% of US Internet users buy CDs in Q3 2008

YTY consumer demand for music among Internet users in the US fell 2% in Q3 of 2008. The proportion of US Internet users, age 13 and older, purchasing a CD in the prior month fell from 25% in Q3 2007 to 22% in Q3 2008. NPD estimates that the volume of CDs purchased declined by 19%. The most dramatic declines in CD sales volume were among teens (down 34%) and among adults age 26 to 35 (down 36%). CD purchases by adults age 36 and older showed a more moderate decline of 10%. 15% of Internet users purchased music from online music stores, such as AmazonMP3, which is an increase of 2% over 2007 and equates to approximately 2.8 mln additional music-download customers. Legal music download volumes increased by 29% in Q3 with positive numbers seen for all age groups except the 50-and-older segment.

Top music download sites in Japan

  Audience, 000 Minutes per Visitor Visits per Visitor
Total Audience 57,356 1,049.1 38.3
MORA.JP 1,388 13.3 2.1
MORAWIN.JP 1,375 5.3 1.9
MUSICO.JP 1,055 4.8 1.8
ONGEN.NET 320 7.2 1.3
MUZIE.CO.JP 187 21.3 4.1
Napster 171 93.0 4.4
Source: comScore

34% of American adults own an MP3 player

According to a December 2007 Pew Internet Project survey, 34% of American adults and 43% of internet users report owning an iPod or MP3 player, up from 20% of the total population and 26% of internet users in April 2006. Young adults between 18 and 29 years old are the age group most likely to own MP3 players, 61% of whom own these gadgets. Parents, those with broadband access, and those with higher socio-economic status (higher income and education) are also considerably more likely to own MP3 players or iPods, according to Pew Internet Project.

Top US music retailers: Apple, Wal-Mart, Best Buy, Amazon, Target

Without providing exact details on the number of digital tracks sold, NPD Group reports on top music retailers in the US in the first half of 2008. NPD’s data reflects the ongoing consumer shift from physical CDs to digital music, as iTunes maintained their leadership position reached earlier this year. Amazon rose from fifth place to fourth primarily for two reasons: first, online CD sales have seen less erosion than CD sales at brick-and-mortar stores; and second, Amazon launched its digital music store, Amazon.mp3, last year.

  1. iTunes
  2. Wal-Mart (Walmart, Walmart.com, Walmart Music Downloads)
  3. Best Buy (Best Buy, Bestbuy.com, Best Buy Digital Music Store)
  4. Amazon (Amazon.com, AmazonMP3.com)
  5. Target (Target and Target.com)

41% of online buyers of music ordered a CD and 58% downloaded digital files

41% of online buyers of music ordered a compact disc and 58% downloaded digital files, according to Pew Internet Project. Put differently, 13% of music buyers say their most recent music purchase was a digital download of music files. 51% of music buyers who used the internet in their research said that online information had no impact at all; 37% said it had a minor impact; 12% said it had a major impact.

56% of music buyers could buy music online

56% of those who bought music most recently said they could have made the purchase online, while 37% said they could not have, according to Pew Internet Project. Among the 22% of music purchasers who bought most recently online, 61% could have bought their music in a store, with 35% saying they could not have done that. Just 7% of online music purchasers said they visited a store to sample music or ask for some help before getting their music online.

How do online music buyers find out about new music?

Ages 18-35 Ages 36-50 Age 51+
Going to the website of an artist,
band, or record label
41% 38% 30
Listening to free streaming
samples of songs online
46 25 21
Visiting an online store that sells
42 32 26
Downloading music files to your
42 24 14
Listening to an internet radio
29 25 21
Reading online reviews or blogs
about songs and artists
28 22 21
Watching music videos online 34 21 16
Going to a MySpace profile of an
artist, band, or record label
31 13 8
Receiving an email from a band,
artist, or record company
15 9 8
Median number of online musicseeking
3 2 1
Number of cases (internet users) 133 171 190
Source: Pew Internet Project

What online users do after buying music

Ages 18-35 Ages 36-50 Age 51+
Go to the artist’s or band’s
45% 40 29
Look online for live performances
by that artist
29 28 26
Read websites or blogs about the
33 26 16
Post the music to your page on
MySpace, Facebook, or another website
16 4 4
Post your own reviews, ratings,
or comments online about the music
10 4 5
Median number of online musicseeking
1 1 0
Number of cases (internet users) 133 171 190
Source: Pew Internet Project

12% of music buyers purchase digital music files

Only 12% of music buyers report that they purchase digital music files, just 23% of internet-using music buyers say online resources were most important to their decision, and 63% say online information had no impact on their most recent purchase, according to Pew Internet Project. 10% of buyers seeking an alternative path (e.g., downloading digital files) can have large impacts on the model. When 23% of younger internet-using buyers, arguably the most active and attractive customers, purchase mostly or entirely digital files, the disruption is consequential.

83% music buyers find their music from hearing a song on the radio, on TV, or in a movie

83% music buyers find out about music from hearing a song on the radio, on TV, or in a movie. 64% of music buyers say they find out about music from friends, family, or coworkers, according to Pew Internet Project. 36% copies of songs from a friend, 35% find out about music by visiting an offline music store, 34% going to a concert is the way they have learned about music they may want to buy. Among people who have bought music in the prior year, 94% said that at least one of these offline means of learning about music had something to do with how they became acquainted with the music they purchased. For internet users in this module who bought music in the prior year, 96% said they learned about music from at least one of these offline means.

27% of internet users downloaded music from the internet in 2008

Shipments of CDs peaked at 942.5 mln units in 2000 and fell by 25% to 705 mln units in 2005, according to Pew Internet Project. Figures released earlier this year show that album sales fell by 9.5% in 2007, even though digital sales grew by 45% in this period. Some 27% of internet users say they have downloaded music from the internet, according to our March 2006 survey. 53% of respondents said they had purchased music in 2007, and 26% of respondents were directed to the module with detailed questions about music purchasing. Respondents who were directed to the music module are not representative of the general population. They are more likely to be internet users 83% and to have broadband at home (59% do), which compares to 73% and 50% respectively in the general population. They are also slightly younger, with a median age among adults of 43 compared with 45 in the general adult internet population.