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Music consumers around the world have spoken ? and they no longer want to purchase compact discs (CD) but instead crave the convenience of music downloads. The CD became available on the market in 1982 and remains the standard physical medium for commercial audio recordings as of 2007 (Compact Disc - Wkipedia, the free encyclopedia, 2007). Recently however, technology has afforded music lovers a new way to enjoy their music with the introduction of music downloads via the internet. This new technology poses a threat to CD sales as the demand for CDs continues to decline. The steady decline in CD sales coupled with an increase in music downloads indicate that music consumers are steadily reaping the benefits of music downloads such as cost, immediacy of downloads, and the freedom to "cherry pick" their favorite songs. According to Jane Weaver (2006), Downloading music from the Internet will reach $2 billion in sales or 17% of the music business in 2007. In addition, "more than 40 million people in the United States have downloaded music at least once from one of the numerous file-sharing services such as KaZaA, according to industry research" (Weaver, 2006). In an article on MSNBC.com titled "Study: Downloads to save music biz," Weaver describes the decline of CD sales, the increase of music downloads, and what the recording industry is doing about the loss of CD sales. In this paper, I will examine why changes occurred in supply, demand, and price for CDs and determine what can be done to thwart the market loss.
Supply and Demand
The demand for the compact disc has continued to dwindle due in part to the availability of music downloads via the internet. Music downloads provide consumers with the abi ...