updated 01:25 pm EST, Fri January 2, 2009
CD Sales Drop 20 Percent
By Jeff Valvano
Media tracking agency Nielsen SoundScan this week noted that physical album sales in the US have dropped a significant 20 percent between 2007 and 2008 to just 360.6 million copies. The drop marks the seventh decline in eight years and is credited partly to both a shift towards online-only music sales as well as illegal file trading. Nielsen warns in particular that the steepest drop came in the fall, when music labels normally depend on an increase due to holiday gifts.
The last-minute drop is specifically attributed to the delays of multiple major albums that reduced the incentive to buy albums at the end of the year.
Market share remained largely flat, with Universal and Sony claiming first and second place among sales for individual labels. Warner and EMI remain at third and fourth places respectively.
While pointing to mounting troubles for the industry, the update is partially countered by sales of online content, which helped mitigate the overall impact on the music business. The album sales drop is reduced to 14 percent after factoring in whole-album online sales and is softened further when including single tracks, which reduce the decline to 8.5 percent.
The revelation of CD statistics follows the first year in which a strictly digital store overtook a physical equivalent for the most popular source of music in the US. Early in the year, Apple's iTunes successfully claimed the lead from Walmart as the most popular American music seller and has maintained its advantage despite Walmart's attempts to drive customers to its stores through album exclusives that have kept albums away from iTunes or other major online stores.