CDs: Preferred Format and Growing Sales More Talent or Fewer P2P Grannies?

The BBCreports:

US CD sales rose by 2.3% in 2004 - the first rise in four years - despite the growing popularity of legal digital music downloads.

The CD format still accounts for 98% of the 666 million albums sold, according to research company Nielsen Soundscan.

A total of 140 million digital tracks were legally downloaded last year, equivalent to 14 million albums.

R&B star Usher was the biggest-selling artist with his album Confessions selling eight million copies alone.

Other top sellers of the year were Norah Jones, Eminem and country stars Kenny Chesney and Gretchen Wilson.

Hmm ... did 2004's extra abundance of compelling talent entice more folks to purchase CDs this year? Nah. It must be because the RIAA has now sued enough grannies to stem the flow illegal file sharing. Yep, that must be it.

The Register weighs in:

CD sales rebounded for the first time in four years in the United States in 2004, according to Nielsen Soundscan, defying the predictions of big label executives. Overall music sales rose 1.6 per cent over 2003 but CD sales, which account for 98 per cent of all new music sold, saw a 2.6 per cent increase.

The new music stores contributed next to nothing directly: just 0.033 per cent, or 1 in 3000 album sales were Net downloads. Nielsen says 140.9 million tracks were sold through the "Nappletizers" - new music stores such as Apple's iTunes Music Store, and Napster, compared to 666.7 million physical CDs. Universal and Sony BMG accounted for 58.7 per cent of internet downloads between them.

But such figures are dwarfed by the P2P networks: over a billion tracks are downloaded each month, according to some estimates.

Is there a correlation between the new music services and a renewed interest in buying CDs? Are downloaders getting physical?

Evidence in the UK suggests that 92 per cent of people who bought from an online store preferred CDs. Hardly surprising, as the real thing sounds better, allows you to share the music with friends and you have something tangible at the end of the day. That's a lot of advantages to something that costs about the same, or in the case of discount CDs, is much cheaper.

Who wants to pay more to get less? ®