wax&wires

2008 Music Sales Not As Drowsy As Previously Feared

Nielsen just released the numbers for 2008 recorded music sales a few days ago, and there’s a few of noteworthy points. Many feared that the increased use of P2P networks would cripple music purchases, but through many mediums, there was actually growth from 2007.

• Overall music sales ROSE over 10%. That includes albums, singles, music videos, digital tracks, etc. with 1,513,000,000 units sold. This was the big relief, as it shows signs of life in an industry feared to be treading water at best.
• Total album sales DROPPED 14%. That includes CDs, LPs, digital albums, etc. Internet album sales, being physical albums purchased through online retailers, declined by close to 9%, which I’m sure contributed to that 14% overall drop. Digital album sales, being non-physical albums downloaded from various online retailers, ROSE 32%. Even with that sharp increase in digital album sales, it wasn’t enough to curb the loss from physical album sales online or in brick and mortar shops.
• Vinyl is back! The number of vinyl units sold rose by close to 90% over 2007 figures.
• Digital track sales rose close to 30% between 2007 and 2008.

So what do these numbers point to?

Not surprisingly, digital music is on the rise. I wouldn’t be so quick to say that the increase in digital music sales means P2P is on the way out though. There are no numbers from Nielsen on how many songs were shared via P2P networks, so there’s no baseline to compare the shift in market share between online retailers and P2P networks. To say that these numbers point to a decline in P2P usage would be assuming that the same amount of music sold in 2007 was going to be sold in 2008, and because more music was sold through legitimate online retailers in 2008, less tracks were shared on P2P networks. The problem is, we have no idea as to the total volume of music moved through the year, through both sharing and purchasing. If that number was up anything over 10.5% (the total growth in legitimate music sales) then the difference is being shared on P2P networks. I’m betting that overall music consumption was up significantly, meaning that the legitimate music markets are not actually seeing their fair share of growth in the big picture.

Another trend I forsee is that artists will begin to abandon the notion of a complete album. Album sales dropped by 14% last year, while digital track sales rose by 27%. Ever since there has been the option to forego the whole album to only buy the songs you like, artists have had to create incentives to try and sell full albums. You’ll get 2 bonus tracks, or a download of some free video content, or access to a new area of their website, etc. Sooner or later, artists are going to get tired of all that extra effort, and just release the songs that have promise of becoming hit singles. I think that’s tragic, but I’m waiting to see it happen in 2009. We’ve already seen lots of artists not putting out LPs, and only releasing a myriad EPs for quick sales of a few songs here and there. The positive aspect could be that some artists will be pushed to cut the filler tracks and create more solid complete albums in an effort to sell full albums rather than particular songs.

For more details, including top selling songs and albums of the year, you can read the full Nielsen report here.

This entry was posted on Friday, January 2nd, 2009 at 8:00 pm. It is filed under wax and tagged with album sales. You can follow any responses to this entry through the RSS 2.0 feed.