For the First Time Ever, Song Downloads Are Declining In the US…

That’s according to a major industry executive source, who agreed to share early-2013 paid download stats with Digital Music News this morning.  The preliminary year-over-year tallies show that a-la-carte download sales are down on the year, for the first time ever.  “It’s down about three percent [year-over-year],” the source relayed, while offering to spill more details over the next few days.  “That’s a first.”

songdownloads2005-2012

The symbolism is dramatic, though numbers-wise, this isn’t completely out of the blue.  Last year, download singles were up 5.1 percent, to a record 1.336 billion units (again, US-specific).  The year prior to that (2011), digital track sales gained 8.5 percent to a then-record 1.271 billion units.  Both of those are single-digit gains, with a clear move towards the present decline.

Digital album sales are still up on the year, also according to the source.  But the base (or denominator) for those gains is much smaller, which means that percentage gains are predicated on far smaller absolute gains.  That said, the rate of increase is also slowing on albums, according to the source.

Last year, broader album sales (physical+digital) slipped a modest 4 percent on the year, according to stats published by Nielsen Soundscan.

So, is this officially the beginning of the streaming era, and the end of the download era?  The 2013 sales story on downloads is obviously still unfolding, though the development follows significant surges in subscription and streaming adoption, particularly from the likes of Muve Music, YouTube, Pandora, and Spotify (across both free and paid).

Still, this may be more about the limitations of downloads and digital sales in general, and less about the relative strength streaming.  “[Spotify CEO] Daniel Ek [just revealed] 6 million subscribers, but 6 million subscribers compared to the 400 million credit card-linked accounts in iTunes, it’s just a drop in the ocean,” analyst Mark Mulligan told an audience at SXSW last week.

Let’s see.

23 Responses

  1. Taylor NOLA

    I won’t be satisfied with streaming until it’s completely disposable. It’s annoying that I can’t my transfer my spotify songs to my shuffle or burn them to a disc.

    Reply
  2. cool

    with 8 million paying subscriber, Spotify yearly revenue will be around $1 billion USD.

    This is nothing when Itunes can sell 1 billion songs in a few short weeks.

    Reply
  3. CadillacFunk

    I feel like I am gonna have to get 2million streams at .00534 ( half a penny) to make any money. However, it is very cheap to digitally publish your stuff now.

    Reply
  4. R.P.

    streams = spotify. downloads = itunes.

    apple is getting trizzed out left and right these days. i like it. 🙂

    Reply
    • AnAmusedGeek

      Good question…

      It appears that iTunes and Nielson have vastly different ideas as to how many downloads were actually sold during ’12 (it appears nielson places it around 1.2 B downloads ?).

      Also, the iTunes dataset shows 5B over 5 months ( 2 quarters). But still much higher then nielson indicates.

      Reply
        • AnAmusedGeek

          Gentleman calm down? wtf…

          Anyway, if I understand you – your claiming the discrepency is due to iTunes/etc selling 4B/12 (300+ million?) albums ?

          I know I’m no expert, but I thought iTunes didn’t sell many albums and was mostly a la carte purchases?

          I’m just wondering if either:

          A.)Neilson no longer has all the data they need to be useful?

          B.)Apple is overstating sales? (maybe to keep wall st. happy?)

          Reply
          • @lassial

            I still share the feelings of AnAmusedGeek as I read it:

            “preliminary year-over-year tallies show that a-la-carte download sales”

            to mean that this should include 1:1 iTunes sales as well.

            Am I missing something essential here?

            Al

  5. TUNE HUNTER

    Spotify and Vevo w/ u-Tube is the blame.

    Also $1.29 (for anything good) and free is another blame.

    In the top year of 1999 when CD with 20 tunes sold for $15.99 after you removed Walmart, their shelf stocking distributor and production cost of CD with the delivery cost label was receiving at the most 35 cent per tune.

    Today with instant access and discovery just apply that price tag and make Shazam, Gracenote, Soundhound and lyrics services a mandatory purchase! You will have 100billion marketplace in 12 months. Streamer or buyer “YOU LIKE IT -YOU GOT IT” billable to your cell phone!

    Reply
  6. wallow-T

    The storage capacity of portable players flatlined years ago. In fact, capacity rolled back. I don’t think there has been a MP3 player or similar phone with more than 64GB capacity introduced in over five years. The iPod classic is a dinosaur, awaiting its execution by Apple.

    The consumer sweet spot on most gadgets seems to be 16GB or 32 GB. Most consumers don’t want to go the extra $100 or so to make the leap to 64 GB storage. And, an increasing amount of their space goes for space-hogging video.

    What this means is that consumers, in the main, don’t want an ever increasing pile of digital music files. Anecdotes back this up — increasing numbers of under-30s don’t want stand-alone music files, even if they are free (pirated) or gifts (parents).

    Reply
    • Casey

      The switch to solid state is what made the change. Much more costly. You can still get large music players. Cowon makes them, iriver makes them.

      Reply
      • wallow-T

        A quick blast through Amazon’s product listings showed me no players larger than 40 GB from either iRiver or Cowon. If larger players ( >64GB ) exist they are not well-known or well-marketed.

        Reply
  7. Jordan Owens

    It is a frustrating thing to handle, but the reality of the matter is streaming is more than likely the future of music rather we want to embrace it or not. I’ve long thought that streaming is the future, although I’ll be the first to say I bloody well hate that. I’m a huge tech geek, but I’m old school when it comes to music. Give me a vinyl or a cd and lets rock with that.

    However, all this aside, it’s still going to be a few good years before streaming becomes the total norm. There has yet to be anyone to make some magnificent streaming service that fully monetizes it in the right way (both business and artist/label), and until some genius finally does figure this out, there will always be to many barriers inbetween it becoming the full norm. Of course, this is all my opinion but from what I’ve seen that seems to be the case. I just think its a horribly difficult thing to come to because then you have to try and value what just one listen to a song is, and then add that all up. Plus, some songs could be “worth” more than others and so on. It’s just total madness really.

    I hate to see us heading this way, but it’s going to happen. I just hope when it does happen it’s done the right way.

    Cheers,

    Jordan Owens
    President / Head Operator
    Sour Mash Recording Industries
    http://www.sourmashindustries.com

    @jordanowens45

    Reply

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