It’s Official: CD Sales Down 13% In ’06

We really didn’t need a study to tell us that business sucks. But just in case, the RIAA’s recent year end report shows overall 2006 CD sales down 13% – the worst single year decline in the modern era. So for most
reports have 2007 declines hovering around 20%. Less profitable digital sales are not coming close to covering the losses.

Like any good trade organization, the RIAA tried to find a positive spin. "Today’s music marketplace has challenges, but it also offers reason for hope and optimism," RIAA chairman Mitch Bainwol said in a statement. "The appetite for music is as strong as ever. . . .the record companies continue to develop additional new
business models and revenue streams like mobile and online videos."

Brainwol is right about one thing. Thanks to the internet and new media the appetite for music is stronger than ever.  Now the RIAA and major labels need to figure out how to get people to believe that music has value.  Variable pricing, value-added bundling, and subsription models may each offer a solution.  Suing college students and children does not.