Compact discs are quickly becoming a thing of the past, as all the activity on iTunes has made it the second largest music retailer in the world. iTunes has passed up Best Buy in sales figures, and that's for all forms of music -- digital and CDs. iTunes sits behind only Wal-Mart in music sales.
Ars Technica is reporting that legal music downloads are up big, but that overall music sales are down. This dip in overall sales is attributed to the opportunity to download single songs, versus having to purchase an entire album to get the song or two that you really want.
And here's a sobering statistic: 48% of teenagers in the United States didn't purchase even one CD in 2007. That tells you definitively that the future of music is in digital downloads. And it makes sense. CDs are an "old" technology, and the ability to download music to a computer and use it on more than one device is a clear advantage.
Unless the brick and mortar stores become a real player in the digital download game, I can't see them hanging on to substantial market share for much longer.
Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.
iTunes now second largest music retailer