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the music industry suffered a decline in sales of CDs. The drop is reported as high as 20%. Answers were sought for the drop in sales. According to the Wall Street Journal, the closure of more than 800 stores in 2006, is one of the reasons for the decline. Legal downloads are growing, but the money paid via the internet is not closing the gap in revenue. One argument is that legal downloads (paid downloads) decrease the money of CD sales. In the first quarter (2007) 81.5 million CDs were sold. It was 20% down on the previous sales figures (2006). In contrast, Apple iTunes sales grew 54%, accounting for 175 million songs sold and paid for. 

It is clear to see that the volume of downloaded songs were more than the actual CDs sold. It is estimated that the songs are mostly ‘singles’ instead of whole albums. Figures quoted are: $2 billion from online music sales; of this $800 million were single-track sales.The argument still stands that people buy downloaded tracks instead of buying the album unless it is a ‘hit album’. In the past consumers were prepared to pay for an album even if they did not like all the songs on it. Now they have the opportunity to just buy what they liked. This translates to CD sales going down and digital downloads are on the increase. Fisher argues that, “Generally speaking, it takes 10 songs to reach the cost of an 'album' (if generalized to $10), so even someone buying a handful of songs off an album leaves a 'revenue gap' compared to a whole album sale”. He also cites the competition of other forms of entertainment such as DVD or CD movies.

Moya (2007) reported about a study done in Canada. This was a research study done by university professors. It was to make a comparison between CDs bough and the music downloaded. This study was conducted by Birgitte Andersen and Marion Frenz of the Department of Management at the University of London in England. It concludes that illegal file-sharing does not cause a decrease in music sales as the music industry has insisted. They argue that the opposite is true. According to them , downloads cause an INCREASE in music purchasing. These researchers argue that whereas earlier studies show a decline in CD sales due to P2P file-sharing, they find that P2P file-sharing actually increase rather than decrease music purchasing in Canada. The research delivered the following key findings:

That for every 12 P2P downloaded songs, music purchases increased by 0.44CDs. This means that downloading about 1 CD increases the buying of half a CD approximately.

There was no relationship between P2P file-sharing and digital purchase via for example iTunes.

About half of P2P tracks were downloaded because people wanted listen to songs first, before buying. They did not want to buy an album , but rather what they wanted.

Illegal downloads had an effect, but minimally; a 1% increase in such downloads, is linked to a 4% increase in CD sales.

Owners of MP3 players were less keen to buy CD albums.

The study further found that other forms of entertainment that was cited in other research as a reason for the decline in本论文由英语论文网提供整理，提供论文代写，英语论文代写，代写论文，代写英语论文，代写留学生论文，代写英文论文，留学生论文代写相关核心关键词搜索。