Early reports of holiday sales this year indicate that sales of MP3 players went flat, while overall music sales were down at a dramatic rate. I wonder if this spells an opportunity for satellite radio.
Dollar sales of MP3 players between November 18th to December 9th were down 16% from the same period last year, while unit sales declined 9%, according to NPD. These numbers, sadly, do not include the iPod - which likely contributed to the decline in other MP3 player sales.
The sales plateau is likely the result of a saturated market. "The market is in a position where most of the people who want an MP3 player have one," NPD analyst Stephen Baker told InformationWeek.
"The iPod is not exactly a blistering growth segment," Baker said. "It's a good segment, and you'll still make money on it, but it's not growing 75% a year."
Shoppers were choosing cheaper - and smaller capacity - flash versions of MP3 players, rather than the more expensive hard-disk-drive versions. Most people don't have enough music and video files to justify paying more for a device with 80-plus gigabytes of storage, Baker said.
Meanwhile, overall music sales during the Christmas shopping season were down an incredible 21% from last year, reports Variety.
From the week of Thanksgiving up through the day before Christmas Eve, 83.9 million albums were sold. That's a whopping decrease of 21.38 million units from 105.28 million in 2006.
All this could mean good news for satellite radio. A sharp decline in overall music sales, plus flattening sales of digital music players (with smaller capacities), means that many people will have less to listen to - especially during an arduous commute.
Marketing the message "hey, you with the teeny MP3 player and no CDs in your car, subscribe to satellite radio!" may be a bit more difficult to get across... but the opportunity is still there. Just need to find a way to seize it.
And speaking of opportunities, at the same time that MP3 and overall music sales are down, dollar sales of GPS devices were up more than 214% and unit sales soared 488%. Kind of makes you think there was a missed opportunity there.