Thursday, April 2 2009

US teenagers, a bellwether customer for the record industry, bought 19 percent less music last year and instead turned to free alternatives like Pandora.com and MySpace.com, according to NPD Group Inc.

Consumers ages 13 to 17 spent 13 percent less on music downloads last year, while compact disc purchases tumbled 26 percent, according to a survey by the Port Washington, New York- based researcher.

The decline coincided with a 24 percent drop in overall entertainment spending by teens, NPD said.

Vivendi SA’s Universal Music Group, Sony Music Entertainment, Warner Music Group Corp. and EMI Group Ltd. are counting on increases in digital download sales to make up for shrinking CD sales. Total US album sales declined 14 percent last year, according to Nielsen SoundScan.

“The music industry still hasn’t recovered from declining CD sales, and now they are being challenged anew by slowing digital sales among teens,” NPD analyst Russ Crupnick said in a statement.

The shift doesn’t mean teens are obtaining more music illegally. Downloads from peer-to-peer networks fell six percent in 2008, NPD said. Meanwhile, 52 percent of teens said they listened to online radio in 2008, up from 34 percent from 2007.

Almost half of teens, 46 percent, used social-networking sites to download or stream music, an increase from 26 percent in 2007, NPD said.

Free music services like Pandora, iMeem and MySpace let users stream music instead of downloading it to their hard- drive.

Fifty-four percent of teens who heard a song they liked on MySpace were likely to return to the site to hear the track again, compared with one percent who said they bought it through Amazon.com Inc., the digital music seller for MySpace, NPD said.