Report Predicts Two More Years of Declining CD Sales

London, UK (April 11, 2007)--The Financial Times of London recently reported on an update regarding the prospects for the global recorded music market in the period to 2012 published by UK-based Enders Analysis. In "Recorded Music and Music Publishing," published recently, the media research company reportedly predicted that recorded music sales would continue to decline for two more years.
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London, UK (April 11, 2007)--The Financial Times of London recently reported on an update regarding the prospects for the global recorded music market in the period to 2012 published by UK-based Enders Analysis. In "Recorded Music and Music Publishing," published recently, the media research company reportedly predicted that recorded music sales would continue to decline for two more years.

The Enders report suggests that digital download and ringtone sales could partially offset the decline in CD sales between now and 2010, when MP3 player penetration is likely to have reached saturation. Global recorded music revenues are expected to be around $23 billion by 2009--but that is a 16 percent drop from the 2005 figure and only half of the industry's best ever year, 1997, when sales reached $45 billion, according to the report.

The report points the finger at digital technology for the steep decline. Performance revenues from live events and broadcast media, including the internet, show continued strong growth, according to the report. But CD sales will continue to trend downward thanks to consumers' ability to download, store and trade--legally as well as illegally--individual music tracks in preference to entire albums, a trend made all the easier by the rapid spread of broadband connectivity.

According to the Enders report, the lifespan of the average hit album is now much shorter. Blockbuster albums (which can enter the upper reaches of the charts with far fewer sales than previously) no longer generate sufficient revenue for the labels to offset costs, and the Financial Times predicts that the industry's woes will require the major labels to tighten their belts.

The Financial Times' report also provides little comfort for retailers, offering the examples of Tower Records, which closed its US record store chain last year, and the UK's HMV Group, which lowered earnings forecasts in late February after suffering a 20 percent fall in CD sales since the first of this year.

Enders Analysis
www.endersanalysis.com