CD Sales Fall Faster Than Digital Music Sales Rise. Or Do They?

I’m reading a report published by the International Herald Tribune about the decline of music sales on physical media such as CDs and DVDs, and I’m not sure what the record industry is whining about.

Here’s a quote that boggles me:

“In 2007… Physical sales of CDs and DVDs fell 13 percent to $15.9 billion. Sales of downloaded songs and mobile-phone ringtones rose 34 percent to $2.9 billion.“

Yes, I agree: looking at these numbers alone, the industry is not earning as much money as they did before. But take notice of the percentages. Physical sales = down 13 percent; digital sales = up 34 percent. At this exact rate of growth, in five years the revenue from digital sales will be 12.5 billion. At the exact rate of decline, physical sales will be down to 7.9 billion in five years. Add the two numbers together, and you get around 20.5 billion in overall revenue. Currently, this number is 18.8 billion.

Full story: mashable.com