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21% fewer american’s buying music

The number of U.S. music purchasers declined by 24 million between 2007 and 2009, a drop of 21% during a period when consumers were purchasing far fewer CDs but beginning to experiment more with digital music, according to data presented by market research firm NPD Group at Digital Media Wire’s Digital Music Forum East conference in New York this week. The market lost 33 million CD buyers between 2007-2009; the number of Americans purchasing digital song downloads also dropped, from 35.2 million in 2008 to 34.6 million in 2009.

NPD analyst Russ Crupnick attributed the digital falloff to consumers experimenting with downloads and then losing interest.

Meanwhile, the amount consumers are spending on digital song downloads rose from an average of $33 per year to $50 per year.

NPD also found that free Internet radio services like Pandora lead to a 41% increase in paid downloads, while free, on-demand services like Spotify actually led to a 13% drop in paid downloads.

“For some people, more listening just means more listening and tends to lead to less purchasing,” Crupnick remarked.

NPD also found a precipitous drop in the number of songs being shared on peer-to-peer networks, which was attributed to growing competition from legal services; fear of spyware; and music shared via other means, like swapping hard drives.