The NPD Group says 24 million fewer people bought music in 2009 compared to 2007. At the Digital Music Forum in New York on Wednesday, The NPD Group’s Russ Crupnick presented some insightful data on U.S. music purchases from 2007 to 2009. The presentation was reported at Digital Music News and CNET’s Media Maverick blog.
From 2007 to 2009, he said, there were 33 million fewer CD buyers in the U.S. and 24 million fewer music buyers in total, a 21% decrease. As the number of music buyers declined, the average amount spent by each buyer rose 2%. That implies a 19% drop in total music spending over those two years, according to Billboard’s calculations. Digital spending, on the other hand, rose 52% to $50 a year per digital buyer.
About an even number of consumers stopped buying CDs in each of the last two years. An earlier NPD study said there were 17 million fewer CD buyers in 2008 compared to 2007. If those numbers still hold true, that would mean 16 million fewer people bought CDs in 2009. The 2009 study also said there were 13 million fewer music buyers in 2008 compared to the prior year.
The number of people who purchased downloads dropped to 34.6 million in 2009 from 35.2 million in 2008, said Crupnick, as new digital buyers tried out the format and quickly lost interest. At the same time, there was a large drop in the number of files traded via P2P networks. Crupnick offered a few explanations: lower quality, threats of spyware, competition from legal services, and music shared through other means such as transfers from external hard drives. Increased use of file delivery sites such as MegaUpload, not mentioned by Crupnick, would also be a plausible factor in the decline.
Two more interesting statistics have to do with music discovery and sales cannibalization. NPD has found that free online radio leads to a 41% increase in paid downloads but free on-demand music leads to a 13% decrease in paid downloads.
Last year, an NPD study indicated teens acquired 19% less music in 2008 than they did in 2007. The quantity of tracks acquired through P2P fell 6% during that time, and the number of teens copying music fell by 28%.
For more info on this year’s Music & Money Symposium, presented in association with Loeb & Loeb, visit Billboardevents.com. For more Better Know A Panelist Q&As click here.