I can’t think of anyone I know over 36 who actually buys CD’s. Anyone!

Music Biz Ignoring Adults, Studies Say
NEW YORK (Billboard) – Two recent studies offer further evidence that the music industry is losing sight of older consumers.
First-quarter music sales fell 10% in the United States compared with last year. But sales were 16% lower among 36- to 50-year-olds, according to data from market-research firm NPD Intellect.
NPD gathered the data from an average of 2,000 music transactions that it surveys weekly and uses to make projections for the entire country older than the age of 13.
Others have warned in recent years that the music industry is neglecting the over-30 market, which accounted for 56% of U.S. music sales last year, according to the Recording Industry Assn. of America (RIAA (news – web sites)). NPD suggests that it is more important than ever for the music industry to refocus.
“Near-term population growth trends should stand as a warning to the industry to reach out to older buyers, because the core teen and college market population is not expected to grow over the next five years,” NPD VP Russ Crupnick said in a statement.
To generate business from those 35 and older, NPD says the industry should promote legacy acts, designate sections in stores for “adult” consumers, and create targeted marketing campaigns for those ages.
NPD’s research suggests that as consumers age, they are less influenced by radio and more likely to find new music while browsing in stores. Additionally, only 4% of music buyers older than 36 said their purchases are influenced by advertising.
“It makes sense for record labels and retailers to revisit marketing and advertising plans, to reach the eyes and ears of older consumers,” Crupnick says.
Projections of music sales for the next five years, however, suggest older consumers will increasingly find a limited selection, according to another study by PricewaterhouseCoopers (PwC).
For one, music distribution is shifting to the Internet, where older consumers are less likely to go for music, according to Stefanie Kane, a partner in PwC’s entertainment and media group.
PwC released on June 11 Entertainment and Media Outlook: 2003-2007, its annual five-year forecast of trends in the business of music, movies, and other media.
PwC projects that the U.S. digital music market will grow to $1.7 billion in 2007 from a projected $44 million in 2003.
Further exacerbating this situation is the increasing dominance of traditional music sales by mass merchants, who reserve less room for the non-hit records generally favored by older consumers.
PwC cites RIAA figures showing mass merchants with close to 45% of U.S. music sales in 2002, compared with record stores’ 40%.
Mass merchants “prevent unknown or developing artists from getting much-needed exposure,” PwC notes in the outlook. “Over time, the result will be a growing reliance on established stars but less fresh music, as well as a weaker back catalog.”
Overall, PwC sees U.S. music sales — which include albums, singles, music videos, and digitally distributed music — declining at a 0.3% compound annual rate during the next five years, from $12.63 billion in 2002 to a projected $12.45 billion in 2007.
Sales of physical albums will drop at a compound annual rate of 3.5% during the next five years to $10.29 billion in 2007. Meanwhile, sales of digitally distributed music will rise at a projected compound annual rate of 165.2%.
PwC pins the decline in the overall market on CD burning and file sharing, as well as the rapid growth in recent years of the videogame and DVD markets.
The professional-services firm also warns that the increasing share of music sales held by mass merchants “will impinge on the availability of catalog product and make it more difficult for new artists to be developed, in the process further limiting the market potential for recorded music.”