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Digital Music Sales Continue to Rise

Technological innovations over the past half century have dramatically changed the way people listen to music. Portable cassette players first allowed people to listen to music, while they were on the move. Portable CD players followed. But new, more sophisticated technology has made these appliances seem bulky compared to the slim, palm-sized MP3 players that have taken much of the world by storm. These can hold thousands of songs, and allow the listener to customize play lists and select songs at will. That has changed how consumers buy music.

Across the United States and many other countries around the world, they are impossible to miss - the unmistakable white earplugs that come with the iPod brand of MP3 players.

The popularity of the iPod and other MP3 players has led to an increase in online music sales. At the same time, sales are down at traditional music stores. Over the Internet, consumers can purchase music by the song, or by entire albums, at set prices. The songs are downloaded directly to the MP3 player, to a computer, or even to a cell phone.

Many people are now purchasing most of their music online. A song typically costs about $1, whereas a traditional CD with multiple songs can cost around $10 or more.

Diana Hugue is working on her Masters degree in technical engineering at the University of Maryland. She says she has purchased more than 120 songs online.

"I would say a good 80 percent of my music I buy online," said Diana Hugue. "You can pick, which songs you want. So, I'm not paying 12 bucks [dollars] for three songs I want [on a particular album/CD]."

She says buying songs over the Internet helps her keep up with music trends.

"I guess I feel, with the Internet, that the music I listen to is much more up to date," she said. "Maybe, you can afford to buy a couple of albums, here and there [now and then]. Now, if I like a popular song, I can get it right away there [on the Internet]."

The rising popularity of online downloads is music to the ears of music industry officials like Jenni Engebretsen of the Recording Industry Association of America.

"There is more buzz [talk] and excitement about music among fans of all ages than ever before," said Jenni Engebretsen. "Fans listening on iPods, on computers, on their cell phones, in kiosks in retail stores."

And music downloads have changed the music industry, forcing it to adapt. The significance of the Internet became apparent a few years ago, with the establishment of Web sites that allowed people to share music they had loaded onto their computers from CDs. The music industry saw declining sales, and took legal action against such Web sites, which, the industry said, promoted illegal sharing of music.

Engebretsen sees results.

"Well our lawsuits have certainly helped to arrest the tremendous growth of illegal peer-to-peer use," she said. "That is movement in the right direction. But, there is still certainly a good deal of work left to be done."

College campuses have been considered a hotbed for online music piracy. The Recording Industry Association is now working with colleges across the country to educate students about illegal downloading, and to promote legal alternatives.

George Washington University, in Washington, was one of the first schools to work with legal online music stores, such as iTunes and Napster, to set up programs that make legal downloading easier for students.

We spoke to several students about their music buying habits, as they walked through the campus.

ALEX: "I do not have to go anywhere to buy it. I can just search on my computer."

ANDREA: "I get to have more of a mix. I can choose the songs that I want."

ADAM: "It's safe on my computer. Somebody can [easily] steal a CD. They can't really steal my computer in the same way."

But not all students are sold on this new way of purchasing music.

"I have not downloaded music since last year. I buy CD's," said one.

Charlie Manning needs that support. Manning is a manager and music buyer at an independently owned music store in Washington. He says the availability of online music downloads has hurt his business. But he believes the store offers something you cannot find on the Internet.

"We still have a store, where people really like to browse, people like to shop," said Charlie Manning. "They like the physicality of looking at the music."

The Melody Record Shop Manning runs sells its share of CD's from today's top music artists. But it also has a wide variety of international music that may be difficult to find online, or at chain music stores.

"We get a lot of people from all over the country and all over the world," he said. "It's sort of reflected, I hope, in the store, what we can sell and what we can stock."

Music fans, who download online, acknowledge there are some drawbacks. Diana Hugue, the University of Maryland student, says there is a danger of overspending online, because there is no cash transaction.

"I have it hooked up to pay automatically through my credit card, so you do not really think," she said. "You are going through, and [saying to yourself], 'I want this song and this song, and maybe these two.' But you do not think about it [what it costs]."

Online music sales currently account for a small percentage of overall music sales, but some analysts believe that share could increase to 50 percent in a decade.