Source: Song Downloads Remain ‘Down 3 Percent’ In 2013…

In March, this could be written off as a blip. In late-June, it looks more like an unmistakeable trend: according to preliminary, year-over-year data shared by a major label source, song download sales are down by roughly 3 percent in the US.

These are year-to-date, cumulative stats, which means 2013 is likely to be the first year — ever — that paid downloads have decreased.  At this rate, here’s what things will look like by Christmas.

songdownloads2005-2012

The dropoff is likely to be reflected in an upcoming, first-half report issued by Nielsen Soundscan, according to the source.  That report, expected in about two or three weeks, will likely show a download decline of “nearly 3 percent.”  “If [Nielsen] says it’s less than 2 [percent], they’re fudging,” the executive told Digital Music News.  “Maybe things go back up in Q4, but [downloads are]  almost certainly going to be down for the year.”

The executive also noted that digital album sales remain up ‘in the healthy single digits’.  But digital albums are still a small part of the action, and sagging CDs will continue to drag the overall album result.

Then, of course, there’s this: Spotify is now expected to surpass 7 million paying subscribers (worldwide) any day now.  That, alongside continued climbs at YouTube, Deezer, and even Muve Music, is painting a pretty clear streaming cannibalization picture.

spotifysubscribergrowth3

 

Written while listening to the chill dubstep sounds of Martyn.

29 Responses

  1. Visitor

    And a guy actually coined the phrase ‘villification of streaming’ in another DMN thread today. Geez…

    Reply
  2. Streaming

    At this rate, streaming revenue will surpass single song download revenue in the USA in about 7 months. Assuming at the current growth rate.

    Streaming Revenue USA 2012: $1.0328 billion (up 59%)

    Single Song Download Revenue USA 2012: $1.623 billion

    Reply
  3. steveh

    I think people should focus on the healthy rise in digital full album sales.

    Since the average album is 10 songs, then in fact song downloads are going up!

    To focus on single song downloads in isolation is mathematically dumb.

    It’s also good that digital album sales continue to go up, as it trumps the older argument against iTunes etc that objected to consumers’ ability to “cherry pick” tracks.

    Reply
    • jw

      This doesn’t make any sense. Song downloads are going down. What the article states is that, though digital album sales are increasing, digital single sales are decreasing enough to offset the growth, resulting in a drop in total digital sales.

      No one is focusing on single song downloads, the article focuses on the total.

      The fact of the matter is that single song downloads no longer makes sense to the consumer, or at least that’s the burgeoning trend. What is the benefit of downloading a song? How long are you going to have your current computer? Or phone? Who wants to be responsible for backing up & transferring that stuff? What’s the difference, from a consumer perspective, between a local play & a stream?

      This is the start of a trend. Local storage is for apps & for user-created content (photos, videos, etc). Non-user-created content, like music, that can be streamed from the cloud should be streamed from the cloud.

      Reply
      • steveh

        Sorry maybe I am blind and bad at reading but this is what the article said:-

        “The executive also noted that digital album sales remain up ‘in the healthy single digits’. But digital albums are still a small part of the action, and sagging CDs will continue to drag the overall album result.”

        The “sagging” that this seems to be referring to is in the total sale of albums combining CDs and digital full albums.

        Where did it say “drop in total digital sales.”? I can’t see that in the article…

        All the statistics I’ve read point to an ongoing increase in total digital sales, but with more total albums sold and less single tracks.

        Reply
        • jw

          I think the most illuminating line is this…

          2013 is likely to be the first year — ever — that paid downloads have decreased.

          I understood the terms “songs” to be interchangeable with “total paid downloads,” rather than singles, which suggests that the dip in digital singles more than offsets the growth in digital album sales (singles are never explicitly mentioned in the article).

          Reply
          • steveh

            Can we please agree that the article is vague and unclear in regard to the total combined digital sales income of unbundled single tracks and digital full albums.

            All I can offer is that for our label in the last 2 years there has been a remarkable increase in whole album sales on both iTunes and Amazon mp3, and our overall income from these two services continues to rise.

            As you may know I am a strong Spotify skeptic, and I believe “cannibalization” is inevitable if Spotify is to achieve its intended “scale”.

            But if digital album sales are still increasing and offsetting a decline in digital unbundled track sales, it’s still a bit too early to scream “cannibalization is here!”

          • jw

            The article isn’t vague. And digital album sales ARE NOT INCREASING ENOUGH TO OFFSET A DECLINE IN DIGITAL UNBUNDLED TRACK SALES. That’s what the article is saying.

            Geez, you’re thick.

          • steveh

            “Geez, you’re thick.”

            Indeed maybe I am. But having read the article several times I do not see an unambiguous assertion of the kind you are insisting upon.

            Calling Paul! Please adjudicate!

  4. Visitor

    Spotify is cannibalizing downloads, the same way the automobile cannibalized horses. It is a better product.

    Reply
    • Visitor

      Of course not — streaming is a direct reaction to piracy.

      Stop mainstream piracy, and we’ll get rid of most of the streaming as well.

      Reply
      • GGG

        You think the best way to tackle piracy is to get rid of streaming, too? Wow. I really hope you’re not in any position to make decisions at any company anywhere.

        Reply
        • Visitor

          “You think the best way to tackle piracy is to get rid of streaming, too?”

          No, here’s how it works:

          Streaming — an industrial attempt to compete with free — is the direct result of mainstream piracy.

          Stop mainstream piracy and you obviously get rid of streaming, too…

          Reply
          • GGG

            Uh..sure, but streaming is part of the solution to kill piracy…and it’s probably working. I have a lot of anecdotal data that says it has. And I’m sure millions of others do too, which would make it real data.

          • Visitor

            “streaming is part of the solution to kill piracy”

            lol, you gotta be joking…

          • GGG

            Yea, you’re right, not one person that pirated music just uses Spotify now….gimme a break.

            Hmm, this past week alone, among what I purchased, I’ve listened to probably 10 albums out of curiosity/mild interest. Without Spotify I would have bought none of them, that’s a guarantee, and mostly likely pirated half of them, not even heard the other half. So instead of $0.00, 10 bands got some change. Now, imagine if there was millions more people on Spotify. That change would look a lot better.

            If you think people are going to suddenly just start buying a shitload of music again, you are delusional. I’m not saying it’s impossible, but as I said in another comment section, we’ve been trying for over a decade to reverse the trend. And everything has failed. And half of you don’t even want to give streaming a chance. It’s a stupid mindset.

          • Visitor

            “Without Spotify I would have bought none of them, that’s a guarantee, and mostly likely pirated half of them”

            Oh, you’re just a thief… eod.

          • GGG

            Also, end of discussion because you can’t counter a point. Just say it. Don’t hide behind that comment. Coward.

  5. tune Hunter

    You are wrong!

    The product is music and it is real marketable property!

    The music is used and abused by cluless, overpaid folks who never had to fight to survive. It is overedue to change staff. 90% of music is under jurisdiction of three labels! Over 60% is under Uni boys playing and drinking with Google boys and making Vevos (Bimmmbos) of the music industry with French elderly parents lost in own juice. Rest is run by retired Uni old man at Sony and almost responsible but not available Russian billionare.

    The best advice for current staff is to take four week vacation and take internship in one of the Middle Eastern bazzars and learn how to peddle some goat cheese with profit big enough for end of the day smoke!

    Reply
  6. Yves Villeneuve

    Is Spotify or streaming growth from expanding into new or existing countries?

    Apple iTunes is growing by 500,000 accounts daily. Assuming a minimum 30% buy downloads, 150k are new iTunes active music accounts daily.

    Let’s put the information in proper perspective.

    Reply
  7. Visitor

    “Apple iTunes is growing by 500,000 accounts daily”

    Are you kidding me? 🙂

    Reply
    • Visitor

      Wow, I just checked it out and it seems to be accurate.

      This is beyond awesome!

      While Spotify just loses money all day long…

      Reply
      • jw

        If iTunes is growing by 500,000 accounts per day, it’s because of mobile apps, not music downloads.

        lmao.

        Yeah, let’s put this all into perspective…

        Reply
  8. Yves Villeneuve

    Also keep in mind, even reported sales are declining, it is quite likely unreported indie sales are picking up the slack. There are are always two sides to a story, especially ones meant to be controversial.

    UNSIGNED AND UNREPORTED INDIE SALES ARE GAINING MARKET SHARE AWAY FROM THE MAJOR AND BIGGER INDIE LABELS. SEEMS TO BE FACT UNLESS THERE IS DATA STATING OTHERWISE.

    Reply

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