Monday, January 7, 2008

2007: US music sales drop,
even including downloads

US "album" sales plunged 15% last year from 2006, as the recording industry marked another weak year of sales despite a 45% surge in the sale of digital tracks.

A total of 500.5 million albums were purchased as CDs, cassettes, LPs and other formats last year, down from 588 million in 2006, said Nielsen SoundScan, which tracks point-of-purchase sales.

The shortfall in album sales drops to 9.5% when sales of digital singles are counted as 10-track equivalent albums. The number of digital tracks sold jumped 45% to 844.2 million; digital album sales accounted for 10% of total album purchases.

For the first time since SoundScan started tracking genre sales, all 12 genres dropped, with rap down 30% and country more than 16%.

Overall music purchases, including albums, singles, digital tracks and music videos, rose to 1.35 billion units, up 14% from 2006.

The recording industry has seen CD album sales decline for years, in part because of the rise of online file-sharing, but also as consumers have spent more of their leisure dollars on other entertainment purchases, such as DVDs and video games.

Warner Music Group Corp. artist Josh Groban had the best-selling album with "Noel." The album, a collection of Christmas songs, sold around 3.7 million copies. A soundtrack for The Walt Disney Co.'s popular "High School Musical" franchise was second with around 2.9 million units sold.

Among last year's other top-selling albums were a "Hannah Montana" soundtrack and offerings from the Eagles, Alicia Keys and Fergie.

Three out of the five top-selling albums for the year were released late in the fourth quarter.

The major recording companies' album market share remained nearly the same, with Vivendi SA's Universal Music Group holding a 31.9% share, up slightly from the previous year. Sony BMG Music Entertainment, a joint venture of Sony Corp. and Bertelsmann AG, continued to rank second with 24.97%, though it dropped 2.4% from 2006.

One trend that should prove encouraging to record labels: 50 million albums were downloaded last year, a 53% uptick.

"That says consumers are embracing both the track format and the digital album format," said Rob Sisco, president of Nielsen Music. In all, 23% of music sales were derived from digital purchases, Mr. Sisco said.

The holiday season brought an upswell of music purchases, with music sales in the last week of the year totaling 58.4 million units, the biggest sales week ever recorded by Nielsen SoundScan.

David Pakman, chief executive of Inc., attributed strong holiday sales at the online music retailer in part to an apparent pick up in sales of low-cost digital music players.

"That's showing us that digital music adoption is reaching into some price-sensitive areas," Mr. Pakman said. (info from The Associated Press)

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