Digital Music Sales Growth Slows Down

Authored by Jay Baage on April 9, 2007 - 10:40am.

New York - Digital music sales growth is slowing from last year, according to first quarter numbers from Nielsen Soundscan. At the end of first-quarter 2007, digital track sales were up 51.9% compared to up 87% for the same period 2006. Digital album sales, which total 11.5 million units, were up 56% (144% for 2006). However, if you count digital as a percentage of album sales, it is nearly 10% now, which is double of what they were at the end of first-quarter 2006.

Overall album sales for the January 1-April 2 period are down 16.6% to 117.1 million units, led by a 20.5% decline in CD album sales. Industry executives attribute the decline to a weak release schedule, the consumer's loss of confidence in the CD and a reduction in store space for the format, according to Billboard Magazine.

Digital track sales, although they are still growing, could not pick up the slack. More than 280 million digital tracks were sold, outpacing album sales by more than 100 million units, according to Nielsen SoundScan. When those digital tracks are converted to track equivalences (10 tracks counting as one album sale), unit album sales were still down 10.3%.

Nontraditional sales -- which include digital album downloads, CD sales through online stores, retailers like Starbucks, TV 800-phone sales and concert hall sales -- continue to be the star performer, with sales up 29.2% to 19.8 million units.

Related Links:
http://news.yahoo.com/s/nm/20070409/media_nm/sales_dc_1
http://www.soundscan.com/index.html
http://www.billboard.com/bbcom/index.jsp