Is the Compact Disc Still Compact?

It’s amazing that the HD DVD format is now on its way out – and yet the CD is still holding its own against online distributors. Or is it?

According to the market researchers of NPD Group, consumers in the United States spent 10% less on music last year. Most of it is attributable to the declining sales of compact discs and an increase in digital sales online (thanks to iTunes).

NPD also reports that CD sales fell by 19% in 2007, while digital sales went up by a whopping 45%.

But perhaps the most obvious and prominent enemy of the CD is piracy. Not only can you buy songs online through iTunes, you can download them for free using P2P (peer to peer). NPD is reporting that of all the internet users in the United States alone, 19% engage in P2P sharing (surprisingly low for me actually) last year. More and more are added to that value by the week with the influx of players from Apple and their competitors (with that comes advertising that reaches millions everyday); plus the ever growing network of internet users.

NPD predicts that Apple will come out as the largest U.S. music retailer by the end of this year. They also reported that Apple has already surpassed Best Buy and Target in the area of music sales.

That leaves number one retailer of all Wal-Mart as the next victim. Would you believe online wagers are actually being bet on whether Apple will surpass Wal-Mart by the end of the year? It’s true – go search for it.

Come to think of it, legal or not, online music is much, much more convenient to own than the plastic compact discs. Physically, you don’t have to store your online music collection anywhere in your house, except for your tiny contraption (iPod and the like) or your PC / laptop. Pictured below Apple’s smallest player: the iPod Shuffle. The 2 gigabyte model holds 500 more songs than a “compact” disc, and it’s a fraction of the size of a CD.

Also when buying content online, you don’t have to buy an entire album to enjoy a single hit song. Why would you go out of you way to buy a CD, rip the song you like on your PC, then upload it to your player when you can simply click on a song in iTunes and download it directly to your iPod?

According to NPD, 48% of the teenager demographic did not buy CD’s at all last year – in the year before that the numbers were only 38%.

Last year, a total of 1 million consumers stopped buying CD’s.

It’s definitely a gloomy outlook.