The sale of the music albums in the United States dropped 9.5% in 2006. The drop continues a downward spiral that has plagued the US recording industry of the past several years. But despite the record low number of album sales in the US, online digital tracks are selling briskly.
Wired.com is reporting that new music industry figures released last Thursday indicate a 45% increase in online digital music sales in 2006. Nielsen SoundScan, the company that tracks sales of music and media within the United States, provided the new sales figures for the industry. And although many analysts are not surprised by the continued downward trend of CD album sales, the 9.5% plunge was considerably worse than experts had predicted.
Although online music sales are more robust, the sales of albums continue to be soft. Single tracks are leading the increase in online sales, with services such as iTunes and Amazon.com’s new MP3 store providing single downloads from thousands of available albums.
It would appear that given the choice, consumers would rather pick and choose the tunes they wish to purchase, rather than buy a full album, which may contain songs they are less interested in. Besides saving money, many online music consumers report that buying single tracks allows them to create better play lists, and avoid unwanted songs when listening to music in “shuffle play” mode.
With Apple’s iTunes store now the third-largest music retail distributor in the United States, the trend toward purchasing single tracks is likely to continue. Newcomer into the MP3 marketplace, Amazon.com, also allows users to purchase and download single tracks; Amazon also has the benefit of using their “one click purchase” button for buying MP3s.
Overall, 23% of all music purchases took place online in 2006; a figure that will surely increase substantially when the 2007 figures are in. And despite the glum outlook for CD albums, analysts are still predicting music sales in general to continue to grow until 2012.
Of course the biggest impetus for this growth in the marketplace is online music sales. And although record labels would love to sell more albums than are currently being shipped, when push comes to shove, a sale is the sale. So single track sales are certainly welcome. In fact, many experts point out that single track sales are actually more profitable for the major labels than full albums.
Mobile music, that is music downloaded and played on mobile phones, is also showing a strong upward trend in the marketplace. An estimated 220 million ringtones were sold in 2007, with predictions indicating that number may double in 2008.
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