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NPD: CD Still King, For Now

Port Washington, N.Y.
– Paid digital music downloads accounted for 35 percent of music tracks
purchased by U.S. consumers in the first half, up from 20 percent in all of
2007 and 30 percent in all of 2008, The NPD Group‘s
MusicWatch survey found.

CDs comprised 65
percent of all tracks sold in the first half of 2009, NPD said. Digital sales
include downloads to the PC and over-the-air full-track downloads to
cellphones, but not cellphone ringtone downloads. The survey also excludes
music-subscription services.

To reach its
conclusion, NPD defined a full-length CD as offering 12 tracks.

“Many people are
surprised that the CD is still the dominant music-delivery format, given the
attention to digital music and the shrinking retail footprint for physical
products,” said Russ Crupnick, entertainment industry VP. “But with digital
music sales growing at 15 to 20 percent, and CDs falling by an equal
proportion, digital music sales will nearly equal CD sales by the end of 2010.”

In music downloads,
Apple’s iTune store expanded its lead, accounting for 69 percent of the digital
music market in the first half, followed by AmazonMP3 at 8 percent. In physical
CD sales, Walmart leads with a 20 percent share, followed by Best Buy at 16
percent, and Target and Amazon with 10 percent each.

When physical and
digital sales are combined, Apple’s iTunes leads in the U.S. with 25
percent of music units sold, up from 21 percent in 2008 and 14 percent in 2007.
Walmart (including Walmart,, Walmart Music Downloads) stayed in
second place with 14 percent of music volume sold at their stores and Web sites.
Best Buy ranked third. 

In its survey, NPD
tracked U.S. consumers ages 13 and older, who reported their purchases of
physical product (CDs), digital music and wireless over-the-air transactions –
excluding ringtones.