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2013: First Year of the Post-CD Era?

Things haven't been looking good for CDs for years now. Ever since the introduction of Napster and the first portable MP3 players, the format has pretty much felt doomed. Since the turn of the century, the CD has hung on valiantly, but its disappearance has remained a question of when, not if.

2012, as it turns out, may have been the CD's worst year yet. Early in the year, it was reported for the first time that digital music had outsold CDs. Perhaps more interestingly, old albums outsold new ones in 2012 for the first time since Nielsen Soundscan started tracking U.S. album sales in 1991.

The CD's long reign as the music industry's main revenue source appears to be at an end at last. So, has the MP3 Prophecy finally come true? Will 2013 be the first year of music's post-CD era? And is that good news for the music industry or bad?

It may be a little early to bury the shiny silver discs just yet. Last year did see the release of some major CD hits, including Adele's soul juggernaut 21, which sold 4.4 million copies, and Taylor Swift's Red, which sold 3.1 million. One Direction had two albums top one million sales.

But even the top smashes seemed to indicate that the record industry is in a very weird place right now. For the first time in the SoundScan era, the same album finished as the top seller in the U.S. for two years in a row, with 21 towering above the competition in both 2011 and 2012.

It took one of the biggest albums in forever two years to sell 10 million copies. At the record industry's peak, the Backstreet Boys sold 11 million copies of Millenium in a single year. We're now firmly in the midst of music's Online Age, so it's hardly news that album sales are down. What's surprising is that they continue to exist at all.

Adele aside, album sales for 2012 were down about 4 percent compared to 2011. (CD sales took the biggest plunge, dropping by 13 percent.) It wasn't only iTunes and illegal downloading taking a big bite out of the CD pie, either. The real story in 2012 was the rise of music streaming services like Spotify, Pandora and others.

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Nathan Smith
Contact: Nathan Smith