Faced with heat from iTunes and other digital downloads, the nearly-three-decade-old music CD is slowly melting away.
iTunes-purchased songs now account for 25 percent of the overall music market--both physical and digital--in the U.S., says an NPD Group report released Tuesday. However, CDs are still the most popular format for music lovers, winning a 65 percent slice of the market for the first half of 2009.
Digital music downloads have jumped in recent years, said NPD, hitting 35 percent of the overall market for the first half of this year, compared with 30 percent last year and 20 percent in 2007.
For the first half of 2009, iTunes itself snagged a 69 percent share of the overall digital music arena, trailed far behind by Amazon.com with 8 percent.
"The growth of legal digital music downloads, and Apple's success in holding that market, has increased iTunes's overall strength in the retail music category," said Russ Crupnick, entertainment industry analyst for NPD Group.
The CD, though, marches on. Among CD retailers, Wal-Mart leads with a 20 percent chunk of the physical music market, said NPD. Best Buy took a 16 percent share, followed by Target and Amazon at 10 percent each.
Still, the days of the CD seem numbered.
"Many people are surprised that the CD is still the dominant music delivery format, given the attention to digital music and the shrinking retail footprint for physical products," said Crupnick. "But with digital music sales growing at 15 to 20 percent, and CDs falling by an equal proportion, digital music sales will nearly equal CD sales by the end of 2010."
Correction at 3:30 p.m.: The venerable audio CD is actually 27 years old.