Compact Discs Singles Market

            
             At the beginning of the 21st century there has been a major change in technology, concerning the music industry. Sales of compact discs, once among the most robust and profitable sectors of popular culture, have fallen dramatically since the advent of Internet file-sharing operations like Napster. .
             Before this technology came out, the CD market was a great success. However the initial demand of this technology drove prices up, as the market moved towards equilibrium.
             Due to such high demand prices stayed high for a considerable time, aggravating consumers. Department stores could afford to lower the CD prices to compete with music stores, which could not. The major music distributors decided to make a privacy policy called the MAP (minimum advertising pricing) which acted as a price floor. This however did not solve the problem of over charging the consumers and prices remained high. .
             Mid 90's the technology of CD-burners, and internet free downloading music became available to the public. This provided a cheap substitute product of the same technological standard. The music industry CD single sales plummet over the last three years as illegal music file sharing exploded. The biggest effect was shown in 2001. The final global figures for 2001 showed revenue was down by 5%. Some 140 million blank cds were used to copy music throughout the year, compared with a total of 110 million CDs, tapes and records that were bought. USA Today said in their article "HP to Pay Antipiracy fee for CD burners" approximately 500 million CDs pirated annually by people creating their own cds from downloads off the internet.
             People offered the explanation that downloading was a reaction to the high prices of the CDS, due to the MAP creating a price floor. However in 1999 the MAP was dropped in order to stop over charging the consumers and prices were to drop by almost 20% worldwide. Thus, the explanation of downloading being a reaction to the high prices is untrue.