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CD sales drop 20% while softened by digital

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.



By Electronista Staff
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Comments

  1. lepton

    Fresh-Faced Recruit

    Joined: Jun 2005

    +1

    Quality check

    Why do they never take into consideration the quality of the music itself. Could it possibly have gone down a tad? Has it followed the changing tastes of the public?

  1. JackWebb

    Fresh-Faced Recruit

    Joined: Aug 2007

    +2

    Re: Quality Check

    Right, some of the indie labels have the quality now and I wonder if that was counted. Also, the model of the big corp taking all the profits needs to be abolished and can be and hopefully will be. Are the big 4 or whatever they are now going to ask for a bailout next? Obviously what we need is for them to go under.

  1. bsnoel

    Fresh-Faced Recruit

    Joined: Feb 2006

    +1

    Not me

    After a long stint of buying mostly iTunes music, I have actually switched back to buying my music on CD. That is to say at least for music that I really want to own. The standard 128Kbps iTunes tracks do not sound as good a CD. I hope to see iTunes offering something of better resolution than their iTunes plus in the future. HD Tracks sounds great, but their selection is lacking, so it's back to CD for me.

  1. testudo

    Forum Regular

    Joined: Aug 2001

    0

    Re: Quality Check


    Right, some of the indie labels have the quality now and I wonder if that was counted.


    Soundscan checks retail sales. So it depends on how much indie music makes it into the retail channel.

    Also, the model of the big corp taking all the profits needs to be abolished and can be and hopefully will be.

    Well, don't look just at the big corp. You need to have all labels abolished, indies too. The reason so many artists start their own label is because they want the big hunk of the pie the label gets. Which is fine for their own music, but do they pass on all those profits to other artists on their label?

  1. bigpoppa206

    Fresh-Faced Recruit

    Joined: Jun 2003

    +2

    Actually...

    the reason most artists start their own label has very little to do with money and more about controlling their own music. Since the 80s when the big music labels started hiring people with MBAs to run the major labels instead of real music lovers, the bottom line has since changed over to producing profits for the stockholders.

    Abolishing labels is not the answer. But the business model needs to be redefined for the 21st Century.

  1. ender

    Junior Member

    Joined: Mar 1999

    +2

    It's the economy, stupid

    So they give no "credit" to the crappy economy for slowing sales? How typical of the music industry to blame online sales and pirating for the decline in sales. After adjusting for online sales, music sales declined by 8.5%. A significant portion of that could easily be attributed to the recession. Is there any real evidence that piracy is increasing and thus contributing to a decline in music sales? And let's not forget poor quality (already mentioned here) and the competition from other entrainment sources (home video gaming, 200 channel cable offerings with digital music included, satellite music networks, etc). These all take away from our music time and dollars. There is far more than piracy chipping away at music sales.

  1. loudpedal

    Forum Regular

    Joined: Oct 1999

    +1

    Costs

    The one thing I don't see counted in the mix is the production costs. Once the tracks are in final form, sending them to iTunes, scanning the album artwork, etc. costs relatively nothing. Making the CDs and printing the artwork is money that doesn't have to be spent on a digital download. If they compare number of tracks sold between physical CDs and downloads, it isn't a 1:1 comparison.

  1. coffeetime

    Mac Enthusiast

    Joined: Nov 2006

    -1

    CD less society

    Yes, CD sound quality is better. But today's life style had drifted toward downloading. Making a trip to CD store and DVD rentals becoming something that is taken away from other priorities. People these days busy like h*** (overtime and two jobs) they don't even have time just to sit in front of stereo listening to HQ HI Fi stereo like back in the 60s, 70s, and 80s anymore. Everything is Facebook, disccusion forums, messengers, and mp3 --- all in one unit.

  1. bobolicious

    Dedicated MacNNer

    Joined: Aug 2002

    -1

    Lossless & DRM free....

    ...for me to START buying electronically, backing up to rewritables or DVD RAM to minimize environmental impact...

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