This report is interesting, but Farhad's choice of emphasis isnt as telling as one might think at first glance. The important information on the NPD study discusses (legal) download-only music's overall market share, which is showing impressive growth, but stil accounts for only 10% of the market. Great growth, but not (yet) a total makret shift.

If iTunes has most of the download market, but Wal-Mart, AMZN and Best Buy are competing for small slivers of the cd world, then this isnt too terribly relevant.

So, by owning the less competetive side of the business, iTunes' strength becomes overstated. Its a sound byte that obscures the more important stuff

In the late 90's, MTV stopped playing music videos. I mean, it was a slow drop off, but they eventually did it. I bet if someone looked into the numbers and dates, you would find a correlation with the decline in videos to the decline in music sales.

Because if new, hopefully good, music isn't introduced to the masses, how are they going to know what to buy? And if all the public is introduced to is the same ten albums, then only ten albums will sell. And if those albums suck, then they won't sell that many.

What I don't get is why consumers are so in love with MP3 players in general. They sound terrible, especially compared to the CD's that these same consumers were purchasing five years ago. I can't believe that people are willing to take a step backwards in fidelity in order to have something portable and trendy. Until FLAC or some other lossless codec is supported, MP3 players will continue to be the best selling rip-off out there.

I'm so retro I only listen to live music. You whippersnappers get out of my moat.

The iTunes store only sells files in the more advanced .AAC format. These sound significantly better than .MP3 files, especially at lower bitrates like the 128kbps encoding rate that's been something of a standard for the past decade.

iTunes has also started selling .AAC files encoded at 256kbps. These compare favorably with uncompressed audio for all but the most critical listening. Amazon's selling 256kbps .MP3 files which, likewise, sound pretty durn good.

I'd rather have a losslessly-compressed .FLAC file, but since these high-bitrate tracks are also DRM-free, they're a respectable alternative for the one-off track you'd love to have. I probably wouldn't buy a whole album this way though, but that's what CD's (especially USED CD's) are for.

If the only CDs being counted are new CDs, then yeah, probably sales have plummeted. But I can attest that practically everyone I know buys mostly, if not exclusively, used CDs from places like Amazon or Amoeba Records. Partly it's financial - CD prices have not dropped hardly at all in the last twenty years. (I remember when they first came out, at around $25 a pop, with the industry promising prices would drop when the medium became more widely available. 25 years later, we're still waiting.)

And partly it's people simply being pissed off at the record industry and their megalomaniacal practice of suing music fans. Personally, I've pledged that, outside of a very small handful of limited edition packages, the big record companies will NEVER get another penny of my money. Maybe if they'd been intelligent from the start instead of obscenely greedy and stupid, they wouldn't have pissed off such a massive number of music fans. As it stands, too little too late - too bad!

that Best Buy was surpassed is that they are a lousy place to buy CDs. I've purchased a few tracks from iTunes, but I am mostly a CD buyer, and I rarely find what I'm looking for at Best Buy