The CD biz is even worse than you thought

Analysts have revised estimates on how quickly the bottom is dropping out of the compact disc market.

In a report, industry analysts Richard Greenfield and Mark Smaldon of Pali Research in New York said they now expect U.S. unit sales of CDs to slide 20% in 2008, a bigger decline than the 15% drop they had previously predicted. Moreover, decline would come on the heels of an expected 18% drop in U.S. CD sales in 2007.

If my math is right (and it is) that would mean that 2008 sales will be less than two-thirds of sales in 2006. You can't last long in that kind of market.

The big question, of course, is how long before retailers pull the plug:

A key factor affecting CD sales: how quickly those big-box retailers such as Best Buy shrink the amount of floor space they devote to music to levels more comparable to Wal-Mart. Combined with the growing utility of digital music, it could easily lead to even more rapid decline in CDs in 2008-2010 ....

I've seen no evidence thus far that the music industry has figured out any way to address the new market realities, other than suing everybody in sight.