[atlantaprog] The times they are a'changin'

Tapping to a digital drumbeat
Music aficionados begin to shift their buying habits away from CDs

<x-tad-smaller>By </x-tad-smaller><x-tad-smaller>DON FERNANDEZ</x-tad-smaller><x-tad-smaller>
The Atlanta Journal-Constitution
Published on: 12/24/05</x-tad-smaller>

The wish list of many music lovers won't be satisfied by the glimmer of a shrink-wrapped CD this Sunday.

Instead, they'll receive a conduit: an iTunes gift certificate, perhaps. Maybe a Napster subscription. Or even credit toward music that can be zapped directly into their cellphone.

Notice the CD aisle shriveling like crumpled cellophane at your local music store? Purchasing digital music is no longer a novelty reserved for savvy teens and collegians.

It's becoming the norm — and those compact discs may become relics sooner than you think.

"I barely buy any CDs; I just buy songs I want," said Midtown resident Jill Rosenthal, 39, who boasts 15,000 songs on her iPod and has a passion for 1980s music. "For 99 cents a pop, it's a lot cheaper. I absolutely love iTunes."

Rosenthal's exuberance is an infectious phenomenon, one that is rapidly eradicating the need for consumers to visit music stores. Some predict the convenience of online music means an imminent end to CDs.

"Over time, people's music-buying habits are going to be digital rather than physical," said Atlanta attorney Bobby Rosenbloum, who represents the National Academy of Recording Arts & Sciences, Microsoft, Cingular and other players in the digital music industry. "My prediction: Within 10 years people won't be going to stores to buy music product any longer. It's very compelling."

Last month the NPD Group, a consumer research firm, reported that Apple's lauded iTunes music store not only cracked the top 10 list of music retailers— a healthy No. 7 — but bested such bruisers as Tower Records, Sam Goody and Borders. ITunes has sold more than 600 million songs since its April 28, 2003, inception.

"The curve is going upward, and it's having an effect on the physical," said NPD analyst Russ Crupnick. "A lot are of people are getting gift cards and iPods [for the holidays], so there should be an increased interest in January."

The CD slide and drift toward digital has hardly been subtle.

CD sales down

Sales of compact discs dived 19 percent from 2000 to 2004, according to the Recording Industry Association of America.

Illegal downloading was credited for causing some of this drop — not to mention entertainment dollars shifting into other areas such as gaming — but the mainstream nature of legitimate online music is causing a drastic affect.

Last year, the RIAA began officially tracking sales of digital singles. Sales in the first six months of 2005 rose more than 153 percent compared with the same period last year.

And, obviously, everyone wants in on this.

Cellphone providers such as Sprint are opening music stores that transfer songs directly into cellphones. The list of options for downloading digital software continues to grow, with independent developers now designing their own. However, Microsoft's Media Player and Apple's iTunes program are still tops. Even Wal-Mart boasts a music download store at Walmart.com.

New approach


Not looking to be left with aisles of unwanted CDs, traditional music retailers are now honing their approach to music transactions.

"It's had an impact on our need to deliver more options," said Brian Lucas, entertainment spokesman at Best Buy headquarters in Richfield, Minn. "What you will see that is different is that we sell iTunes gift cards and Napster subscriptions and Rhapsody subscriptions."

Rhapsody, which has been hawking music online for more than three years, boasts 1.3 million clients. Reflecting the flexibility of the online music business model, the company not only sells songs but offers a subscription service where customers can sample songs from a library of 1.5 million without having to actually purchase them.

"ITunes you buy and own forever," said Rhapsody spokeswoman Ronda Scott. "You have that ability with Rhapsody as well, but we also offer subscription services where you can stream anything on our library. They find a lot more music with unlimited access, artists that they would never find otherwise."

The music industry, which once appeared unnerved by the shift from software such as CDs to direct downloading, is not only embracing it but looking to use the medium as a way to promote emerging artists.

Warner Music Group, for example, is embarking on distribution of songs in "clusters" as opposed to full-length albums, which would introduce music from new bands to consumers outside of an independent record store.

"Digital downloading has become such an ingrained part of the music business that it generates an entrepreneurial way to the marketplace," said Jason Fiber, president of cordless recordings for Warner Music Group. "There's a maturing market that we have an opportunity to be involved in and do new things."

CD sales have slowed this holiday season for many reasons, Lucas said, including product that wasn't as strong as in 2004.

But don't perform last rites on the shiny discs yet.

12,000 titles per store


Best Buy still carries an average of 12,000 titles per store, and Lucas said that commitment won't change. Other outlets abound for those who prefer a traditional means to their music.

Despite the dour figures and forecast, independent music store Criminal Records in Atlanta's Little Five Points celebrated its most successful year yet, according to owner Eric Levin.

There may even be a future niche for CDs — as nostalgia.

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