NPD Cites Music Upswing; Less Piracy And Online Radio Growth

NPD Group’s most recent report indicates the “number of U.S. music buyers is on the upswing.” Based on the research company’s “Annual Music Study,” growth can be attributed to the increased total amount consumers are spending on music and a growing number of CD and digital download buyers. In what is good news for the music industry, NPD states, “There are still nearly twice as many CD buyers in the U.S. as there are paid digital-music downloaders.”

Recent years have seen sharp declines in music sales—falling prices and a digital marketplace that had stopped growing—but 2011 saw track sales grow 4% while CD sales showed less declines than in past years.

NPD finds that, “The total number of CD music buyers increased for the second consecutive year, growing 2 percent to 78 million.” They speculate this happened due to several reasons—

1.) Consumer perception that music is now a better value;

2.) They are better informed about what is available, and/or;

3.) Consumers now have “a wider variety of sources to discover new music” such as Pandora and Spotify.

“CDs are the gift that keep giving, which proves that even in an increasingly digital age, consumers will respond to quality content and strong perceived value, even if it comes in a physical package,” said Russ Crupnick, Sr. VP of Industry Analysis at NPD. “The CD still has a powerful attraction for both older, mainstream consumers who listen in their cars, as well as to super fans who enjoy owning the package and assortment of songs from their favorite artists.”

Additional Factoids

• Paid digital download buyers increased 14% in 2011 to 45 million customers.
• Unpaid music acquisition i.e. P2P file sharing or trading music on hard drive declined. “NPD estimates that 13 percent of Internet users downloaded music from a P2P site, which is down from a peak of 19 percent in 2006.”
• Fastest growing form of music listening was online radio. Online radio grew from 29% of the internet population in 2010 to 43% in 2011.

NPD’s “Annual Music Study” is based on 5,799 completed online surveys of U.S. consumers age 13 and older conducted between Dec. 14, 2011 and Jan.