Music Industry Decline Accelerates

Fourth-quarter sales suffer worst drop ever as retailers reduce shelf space


The music industry's woes only worsen. We're now experiencing what one analyst calls the "worst decline in the history of the CD."

Physical album sales have plunged about 27% so far in the fourth quarter, says Rich Greenfield at Pali Research. That's a significant drop from the rest of the year, which was bad enough with declines in the mid-teens. This quarter also tops the 21 percent fall in early 2007.

Digital tracks sales are up, but not nearly enough to make up for lost CD sales. Major retailers, meanwhile, are reacting by shrinking shelf space for CDs and cutting prices, with Wal-Mart often selling CDs below $5, says Digital Music News.