Music sales on Net rise

Downloads tuning out mom-and-pop vendors

Recorded music continued its inexorable shift away from the corner store to the Internet and mass-market retailers like WalMart and Best Buy last year, according to the Recording Industry Assn. of America’s (RIAA) annual consumer profile of music buyers.

Survey also showed online purchases rising, while the average consumer in a contracting market is getting older.

Out of total recorded music sales of $11.85 billion last year (down from $12.6 billion in 2002), rock music remained the most-purchased genre, representing 25.2% of the market, up slightly from 24.7% in 2002. Rap and hip-hop came in second with 13.3%, followed by R&B with 10.6% of sales. Country music was a close fourth, soundly beating out pop, religious, classical and jazz genres.

The annual demographic survey registers the habits of 2,900 music consumers in the United States, and is designed to detail purchasing patterns over the past decade.

CDs purchased outside of non-music-only outlets such as mass merchandisers, electronics stores and bookstores, now constitute 52.8% of total record purchases. Purchases at conventional record stores continued to decline in 2003, from 36.8% in 2002 to 33.2% in 2003.

Noting that consumers are increasingly aware of legal ways to buy music online, RIAA’s survey showed that Internet purchases (including online sales of CDs) now represent 5% of all sales, up from 3.4% in 2002. Digital downloads are still a tiny fraction of the total market at 1.3% of the total, though the increase was substantial compared with .5% in 2002.

While men and women are buying music at roughly the same levels, legal music consumers are getting decidedly older. Buyers over 45 now represent the largest single consumer segment, responsible for over 26% of all sales. At the same time, survey showed a decrease in spending by tweens, teens, and young adults (10-24 years of age) over the last two years relative to other age groups. Tweens, teens, and young adults collectively comprised 33.7% of music purchasers in 2002 but only 30% of purchasers in 2003.

“The decline in young buyers, who are the most active downloaders on peer-to-peer systems, is another confirmation that illegal downloading is one factor, along with economic conditions and competing forms of entertainment, that is displacing legitimate sales,” said RIAA chairman and CEO Mitch Bainwol. “In fact, a recent study by Voter Consumer Research affirmed that consumers who download more are buying less. In that study, 33% of people between the ages of 18-24 who download said they bought less music than in the past year.”

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