Music industry takes billion dollar hit

With more people owning iPods and MP3, CD’s are being phased out. They will soon meet the same fate as the old-school cassette tape. According to the Recording Industry Association of America, album sales have been falling an average of 8 percent each year.Senior Alexis Guerrero stopped buying CD’s a couple of years ago and prefers listening to music on her iPod.

Guerrero said plugging in her iPod instead of changing CD’s is safer while she’s driving.

“With CD’s, I would have to change them out often to get different songs,” Guerrero said. “I would be distracted trying to look for my CD’s in my car. My car is iPod compatible. So, I create a playlist ahead of time and just plug my iPod in and go.”

In an interview with  CNN Money , Dan Ingala, lead singer of the band Plushgun, believes the music industry will never win the battle against illegal music downloading and should just give in to the new way of getting music.

“People will steal music regardless, so it’s not worth trying to fight against something where the fight’s already over,” said Ingala. “It’s just a matter of adjusting and at the same time, its helping us create an audience.”

Apple’s iTunes is helping generate some profit from music lovers, but analysts say it is not enough to recover the costs. People like the idea of downloading a song for free instead of spending $14 for a CD they only listen to once or twice.

Record labels are also making money from licensing their music to Internet radio stations, like Pandora and Myspace Music. YouTube is also being hit with licensing fees. The music industry is trying everything possible to get revenue back up and start making money again.

Anaylists expect revenue to continue declining and do not see the music industry gettting profit where it was a decade ago.