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Even as streaming music gains users, one third of consumers are still purchasing CDs, while more than 16 million buy vinyl LPs

According to MusicWatch, a company providing consumer research for the music industry, despite the precipitous decline in sales for CDs over the past several years, nearly one in three Americans age 13 and older bought at least one music CD in the past year. Even with falling CD sales, the physical music format accounted for $1.9 billion, or 32 percent of U.S. music revenues in 2014, according to the Recording Industry Association of America (RIAA).

Amazon continued to lead the pack of CD retailers, with 26 percent share of revenues last year. Amazon was closely followed by Walmart, at 23 percent, and Best Buy, at 15 percent. Local independent music stores, the driving force behind Record Store Day on April 18, 2015, accounted for 5 percent of U.S. CD sales in 2014.

Share of CD Sales Revenue

Source: Musicwatch, Inc., 2015

“While CDs might seem old-school in the digital music age, Americans still spent nearly two billion dollars on them last year,” said Russ Crupnick, founder and managing partner of MusicWatch. “Although music streaming and downloads have reduced sales, last year approximately 80 million people bought at least one music CD.”

According to the MusicWatch Profiler Report, a decade ago nearly 40 percent of CDs were purchased by consumers between the ages of 13 and 24. That number has been sliced in half, as consumers age 36 and older now account for nearly 60 percent of CD buyers.

Celebrating Vinyl

The RIAA has noted that the vinyl record, the main music format celebrated on Record Store Day, was the fastest growing music format in 2014. MusicWatch estimates that more than 16 million Americans age 13 and older bought new and used vinyl records last year. Amazon was the most popular shopping destination among vinyl record buyers.

Top Five Vinyl Record Retailers

Source: MusicWatch, Inc. 2015

Half of vinyl record buyers are between the ages of 18 and 34; however, nearly one quarter of vinyl LP buyers were age 50 and older. “In some ways vinyl is the most appealing music format available today,” Crupnick said. “The format combines the collectability and connection to artists that younger fans desire, with the nostalgia that boomers value. No doubt there are also some older buyers, especially classical or jazz music listeners, who are convinced vinyl provides the absolute premium listening experience.”

Methodology note: The data referenced in this press release is from the MusicWatch Profiler Report, which was released in March 2015. MusicWatch surveyed 7,500 U.S. consumers, age 13 and older; results were projected to the US population.

Apple iTunes music download share slipped in 2014, according to MusicWatch

Although music streaming is getting the biggest headlines these days, recent research from MusicWatch, a company providing consumer research for the music industry, indicates that consumers have not entirely given up on paid music downloads. In fact, one third of U.S. consumers purchased music downloads last year.

While 7 out of 10 music download buyers shopped at music download leader iTunes last year, the company also ceded market share to Amazon MP3 and Google Play. iTunes’s share of music download revenue in the United States slipped from 67 percent in 2013 to 52 percent in 2014, while Amazon MP3 rose 2 percentage points and Google Play rose 4 percentage points.

Share of Dollar Sales: Paid Downloads (tracks and albums)

Source: MusicWatch, Inc., 2015

According to recently released data from the Recording Industry Association of America (RIAA), paid downloads accounted for 37 percent of U.S. music revenues, while streaming contributed 27 percent.

“As the market leader, Apple bore the brunt of the drop in download sales, but iTunes still has tens of millions of loyal, paying music customers,” said Russ Crupnick, founder and managing partner of MusicWatch. “Armed with a strong iOS product lineup and the potential of Apple Pay, the company is well positioned for its anticipated music-streaming service re-launch.”

In fact, iTunes music revenue share among iPhone users is 71 percent. Even among Android smartphone users, iTunes garners a 34 percent share, which is higher than Google Play at 20 percent. At a time when the smartphone is the go-to device, many Android phone users still use their computers to buy digital tracks from iTunes.

On the streaming front, MusicWatch estimates that there are now nearly 130 million music streamers, using both audio- and video-based services. “If the trends continue through 2015, streaming could surpass paid downloads as the largest revenue source for the U.S. music industry,” said Crupnick.

The top services ranked on past three-month usage are as follows:

1. YouTube (for music listening and music video streaming)
2. Pandora
3. Spotify
4. iHeart Radio
5. iTunes Radio

Methodology note: The data referenced in this press release is from the MusicWatch “Profiler Report,” which was released in March 2015, and from the “Music Acquisition Monitor” that is scheduled for release in April 2015. The “Profiler Report” surveys more than 7,000 U.S. consumers, and the Music Acquisition Monitor samples 5,000 U.S. consumers.