U.S. Digital Track Sales Down 3.4% This Year, Overall Album

[areyoureadytojump]

www.billboard.com/biz/articles/news/digital-and-mobile/5740797/us-digital-track-sales-down-34-this-year-overall-album

U.S. Digital Track Sales Down 3.4% This Year, Overall Album Sales Drop 6.1%

By Ed Christman | October 03, 2013 12:54 AM EDT

U.S. digital sales continue to be under pressure. In the third quarter, the digital track sales decline accelerated and now the slowdown of digital album sales growth is beginning to seep into red.

For the nine-month period digital track sales are down 3.4% to 974.5 million from the slightly over 1 billion scans accumulated in the corresponding period of 2012, according to Nielsen SoundScan. But in the third quarter, the decline was nearly 6% to 292.4 million units from the 311 million scanned in the corresponding period last year. That decline follows a 3.3% decline in the second quarter, when scans are compared to the 2012 second quarter, and a 1.3% decline in the first quarter.

While digital album scans year-to-date are up 2.6% to 87.7 million units, the slowing growth the format experienced in the second quarter turned into a drop in the third quarter, when sales declined nearly 5% to 26.9 million units from 28.3 million units recorded during 2012's third quarter.

Within digital albums, catalog albums are dragging down sales as year-to-date that category is down 1.4% to 42.4 million units, versus the 6.6% increase to 45.3 million units that current digital albums enjoy. But in the third quarter, current digital album sales also actually declined 1.7%.

Overall album sales are down 6.1% to 205.2 million units for the first nine months. The CD's driving the overall decline in album sales as the disc format dropped 12.8% to 113.1 million units. Vinyl albums, meanwhile, are up nearly 30% to 4.1 million units.

Also on the good news front: This year has already produced 5 albums that have passed the million-unit milestone versus the three titles that accomplished that feat last year by the end of the third quarter. This year, Justin Timberlake's "20/20 Experience" leads the pack with 2.3 million scans, followed by Bruno Mars' "Unorthodox Jukebox" with 1.23 million units; Imagine Dragons' "Night Vision," with 1.03 million units; Jay Z's "Magna Carta…Holy Grail," with slightly over 1 million units, and beating out the other million unit seller, Mumford & Sons "Babel" by about 2,000 units. Last year, Adele's "21" was the top seller, with scans at almost 4.03 million units.

Moving over to digital tracks, Macklemore & Ryan Lewis' "Thrift Shop," which features Wanz is the top selling song so far this year with 5.96 million units. But Robin Thick's "Blurred Lines," which features T.I. & Pharrell, is breathing down its neck with 5.9 million scans.

Finally, turning to market share, the Universal Music Group leads the pack with 38.3% in share for album plus track equivalent albums (TEA); while Sony Music Entertainment comes in second with 29.1% and the Warner Music Group ranks third with 19.7%. Meanwhile, independent distributors collectively account for 12.3% of market share, but thats when tracking distribution ownership. When independents are tracked by label ownership, their market share jumps above 30%.

[badrobot]

So the dream that digital would eventually make up for physical sales has kind of died. It's been obvious for some time that selling music really is a "loss leader" for getting artists licensing deals, tours, merchandising, etc. where actual income can be made.

[Glove Slap]

I don't think anyone really expected digital sales to make up for physical sales. It's been obvious for a few years now that the growth in digital sales was smaller than the overall decline in physical since its peak. And that's before you account for the difference in revenue generated by the sale of a physical album in the 90s to the sales of digital singles and albums today, even when you account for the near lack of variable costs when it comes to digital.

Either way, the true money of the music industry remains where it has been for ages: publishing.

[areyoureadytojump]

Oct 5, 2013 13:09:21 GMT -5 badrobot said:

So the dream that digital would eventually make up for physical sales has kind of died. It's been obvious for some time that selling music really is a "loss leader" for getting artists licensing deals, tours, merchandising, etc. where actual income can be made.

Yes. This is why Beyonce has not put out an album this year.

[upsidedown]

Oct 5, 2013 13:34:35 GMT -5 areyoureadytojump said:

Oct 5, 2013 13:09:21 GMT -5 badrobot said:

So the dream that digital would eventually make up for physical sales has kind of died. It's been obvious for some time that selling music really is a "loss leader" for getting artists licensing deals, tours, merchandising, etc. where actual income can be made.

Yes. This is why Beyonce has not put out an album this year.

Well... I think there's multiple reasons why that has happened lol

[areyoureadytojump]

^She performed at the Super Bowl. Went on a world tour! That's when you put out a new album!

[Deleted]

As with all things that came before it, digital sales were going to fall off at some point.

The actual purchase of a song or an album is no longer the only way to 'consume' music. This will have an effect on overall purchases.

I would bet though that people are 'consuming' music now at rates higher than ever.

[Glove Slap]

Oct 5, 2013 13:38:53 GMT -5 areyoureadytojump said:

^She performed at the Super Bowl. Went on a world tour! That's when you put out a new album!

Not if your label rejects the album you submitted.

[dzjx]

This is a really interesting interview to watch with an exec in the industry who says that streaming will eventually overtake sales in terms of revenue and there will be ''rampant growth'' in the music business and for Labels.

[Deleted]

Oct 5, 2013 20:42:44 GMT -5 dzjx said:

This is a really interesting interview to watch with an exec in the industry who says that streaming will eventually overtake sales in terms of revenue and there will be ''rampant growth'' in the music business and for Labels.

That's widely believed throughout the industry. The focus is turning toward streaming.

[upsidedown]

I just don't get streaming. Why would you wanna stream something when you can have it, without the internet, 24/7

[dzjx]

Oct 5, 2013 23:24:40 GMT -5 upsidedown said:

I just don't get streaming. Why would you wanna stream something when you can have it, without the internet, 24/7

well many people think that paying 9.99 per month for any song on demand all the time on your smartphone/iPod is cheaper than paying to actually buy music. Then of course there is ad-supported streaming which is free for the user but that is less mobile.

I wonder if in the future they will certify albums by streams and sales. Like 100,000,000 streams of an album is going platinum or something.

[Rodze]

Streams are already certified as single sales (gag), so albums will probably be too inevitably.

[jebsib]

With streaming, can't a song just be pulled forever at any given point?

But if you own it, you can listen to it for the rest of your life.

[Adonis the DemiGod!]

Oct 5, 2013 20:42:44 GMT -5 dzjx said:

This is a really interesting interview to watch with an exec in the industry who says that streaming will eventually overtake sales in terms of revenue and there will be ''rampant growth'' in the music business and for Labels.

That is what my friend from Epic said to me a few weeks back.

[Adonis the DemiGod!]

Oct 5, 2013 23:24:40 GMT -5 upsidedown said:

I just don't get streaming. Why would you wanna stream something when you can have it, without the internet, 24/7

I don't get it either but people like it. It's like cable for music.

[HolidayGuy]

Vinyl album sales topping 4 million in sales. I wonder if sales will continue to increase year after year.

[🅳🅸🆂🅲🅾]

Oct 5, 2013 23:24:40 GMT -5 upsidedown said:

I just don't get streaming. Why would you wanna stream something when you can have it, without the internet, 24/7

I use Spotify and other similar streaming services as a way to preview some albums I am on the fence about potentially buying. It has also been a great way to hear certain albums without illegally downloading them or getting torrents. I have actually bought more music in digital and CD form because I can 'try before I buy'.

[Adonis the DemiGod!]

Many people simply don't care to own the music. They want to listen to the music.

[Push The Button]

Oct 6, 2013 13:13:53 GMT -5 jebsib said:

With streaming, can't a song just be pulled forever at any given point?

But if you own it, you can listen to it for the rest of your life.

That's the caveat. Not to mention, if you want to stream on your cell phone, that is a huge use of data that will eat up your bill.

Do people just plug their iPods into their cars these days? That seems like such a hassle vs. just inserting a CD into the player.

[Rican@]

Actually Spotify is quite useful, since I got it, I stop buying and downloading music. I just simply saved the playlist (or playlists) as offline and I can listen to it anywhere on my iPod. I have nearly four hundred songs saved as different playlists. It is actually a lot more simpler because instead of worrying about updating your iPod with music, you just turn on the offline feature. I have it on both of my Apple devices and I have so much storage on my iPod that it won't ever take up too much space.

I will still occasionally buy an album though.

[Caviar]

Oct 7, 2013 6:33:32 GMT -5 Rican@ said:

Actually Spotify is quite useful, since I got it, I stop buying and downloading music. I just simply saved the playlist (or playlists) as offline and I can listen to it anywhere on my iPod. I have nearly four hundred songs saved as different playlists. It is actually a lot more simpler because instead of worrying about updating your iPod with music, you just turn on the offline feature. I have it on both of my Apple devices and I have so much storage on my iPod that it won't ever take up too much space.

I will still occasionally buy an album though.

This. I actually stream more music than ever now and I can just save the playlist for offline play and I can listen to it whether I have data or not. For example I still haven't purchased Ariana or Tamar's albums yet because I cannot stop steaming them! I keep telling myself I'm going to buy their albums but I'm waiting on AmazonMP3 to put them on sale.

[Push The Button]

Do you guys use the paid streaming services on Spotify, or the free, ad-supported version?

[Adonis the DemiGod!]

R&B/HipHop songs do better on streaming services than traditional downloading like iTunes. So if people do shift to these in larger numbers we could see more Urban tracks hitting the upper reaches of the charts as a result.

[Rican@]

Oct 7, 2013 15:27:25 GMT -5 Push The Button said:

Do you guys use the paid streaming services on Spotify, or the free, ad-supported version?

Paid. It is so easy access. I love it.

[Caviar]

I switched from Spotify to Google Play Music for $10/mo.

[areyoureadytojump]

Oct 6, 2013 13:53:59 GMT -5 HolidayGuy said:

Vinyl album sales topping 4 million in sales. I wonder if sales will continue to increase year after year.

Don't forget cassette sales are up! lol

[🅳🅸🆂🅲🅾]

Oct 7, 2013 23:11:10 GMT -5 areyoureadytojump said:

Oct 6, 2013 13:53:59 GMT -5 HolidayGuy said:

Vinyl album sales topping 4 million in sales. I wonder if sales will continue to increase year after year.

Don't forget cassette sales are up! lol

The search for a cassette player begins...

[Adonis the DemiGod!]

People's heads are going to explode when R&B and Hip Hop Rule the streaming charts as access becomes more widespread.

[Push The Button]

Oct 7, 2013 16:40:24 GMT -5 Rican@ said:

Oct 7, 2013 15:27:25 GMT -5 Push The Button said:

Do you guys use the paid streaming services on Spotify, or the free, ad-supported version?

Paid. It is so easy access. I love it.

I feel like I already pay for so many monthly entertainment services - Netflix, Roku, Hulu Plus, iTunes Match, SiriusXM. Not to mention my cable bill. Buying CDs still feels like an investment to me.

That's a downside to the "everything everywhere" option, when you can pick and choose what you want, those subscriptions can add up.