Concrete Data Shows That Downloads are Falling Faster Than Physical Sales

Concrete Evidence Shows Digital Downloads Are Falling Faster Than Physical

The figures prove that digital music sales are falling quicker than physical sales…

Last month, DMN was provided with some interesting information from PricewaterhouseCoopers.  According to PwC’s projected figures, revenue from physical formats are falling at a (compound annual) rate of —12.3%, while revenue from paid music downloads are falling at a (compound annual) rate of —14.3%.

Which means that digital downloads are falling at a faster rate than that of physical, that latter of which has more staying power.  However, that was based on predicted figures.  Now, music reporting firm BuzzAngle has offered concrete evidence to prove that digital album sales are falling faster than physical sales.  The figures are below.

Concrete Evidence Shows Digital Downloads Are Falling Faster Than Physical

In the first six months of 2015, there were over 55 million digital album sales in the US.  However in the first six months of 2016, digital album sales in the US dropped to just over 45 million.  That’s a decline of nearly 10 million, a 17% decrease.

But that’s just digital album sales: BuzzAngle also noted that digital song sales are actually falling quicker than digital album sales, at a rate of (-) 24.2%.

By comparison, physical album sales in the first six months of 2015 were at just over 44 million, which dropped to just over 40 million in the first six months of 2016.  That’s a decline of 4 million, which constitutes to a 9% fall.  The data confirms the predictions: downloads are receding faster than physical, and the public is treating each format differently.

Why?

The massive decline in digital downloads is coming alongside a surge in streaming. With more and more people signing up to on-demand music streaming services like Spotify, Apple Music, and Tidal, there is less need for them to download a song or album.  In fact, it could be argued that streaming is directly cannibalizing towards downloads, simply because streaming does almost everything downloads does, just better.

A huge part of physical’s resilience is coming from vinyl.  But even in the digital era, CDs still matter to people, more so than the convenience of downloading a song or album digitally.  That’s being demonstrated in multiple research reports, and conflicts with age-old predictions of the death of CDs.

Enter Adele, who sold more than 1 million albums this year, with 65% of overall album sales in CD format.  Some call that an anomaly, others see a format that still has staying power.

 

(Image by Henry Burrows, Creative Commons, Attribution-ShareAlike 2.0 Generic, CC by-sa 2.0)

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3 Responses

  1. Remi Swierczek

    Thank you UMG for sharing YouTube vision with Google.
    Vevo – your brainchild – is amazing addition to YT media shredder- you must be struggling with management of all advertising dollars flowing in your direction!!

    UMG must be praised for green light given to visionary, Mr. Daniel Ek to start his breakthrough, super-charged version of Napster!

    WAKEUP music nerdland!

    There is $200B of annual music goodwill out there! Conversion of just Radio and streaming to discovery moment monetization MUSIC STORES would deliver $100B music business before 2020.

    Mr. Bollore and Mr. Blavatnik, it is overdue to start conversation with Larry Page on genuine MOONSHOT delivering the biggest cash generator of digital era with fair treatment and respect to 15 million creators!

    Reply
    • Jim

      “There is $200B of annual music goodwill out there! Conversion of just Radio and streaming to discovery moment monetization MUSIC STORES would deliver $100B music business before 2020.”

      This is interesting.

      It’s not clear what you’re talking about, but there is money on the table. And thereis room for a new music store. The record labels have done a terrible job over the last 20 years making money from the internet. It had to have been at least 15 years ago that the label realized that the internet wasn’t going away. Shouldn’t the major label sites be amazing music portals with everything you’d want from every label act? Great websites, the winner music sites? Should’ve been that way from the beginning of the internet. Sell everything, take in lots of money directly from the website. Never happened.

      I like the idea of money buying points which are redeemed on the website. Consumer goes “yes, I’ll spend $50 on music”. And maybe it’s 10 points for a penny, and each song you stream is a point. Or 10 points, whatever the case may be. Maybe some streams are free. Points can get you a physical CD mailed to your house. Gift cards. Somebody in the music industry should hire a guy who knows how to use a computer and start keeping the money they should be able to make and stop letting Silicon Valley middlemen take a cut when they really aren’t bringing anything to the table. I can do a website, so can many others. Who has the acts? Who can withhold the acts from the Silicon Valley middlemen? They are the ones who can do that themselves.

      Ideally, the artists themselves own this website, get paid what they want to be paid for a stream or what ever else they might be selling. A clothing line. Memorabilia auctions. Concert tickets. If the acts joined together they could make plenty of money this way.

      Reply
  2. Nicky Knight

    Here’s my five cents worth…

    iTunes
    The HITS are still selling in the hundreds of thousands and millions…

    Popular cover versions still sell something…

    iTunes Ringtones are still selling ..

    There’s a lot of crumbs in the iTunes download business and remember crumbs make a loaf…

    As for CD, I don’t know anyone who’s purchased a music CD in the past few years..

    Of course everyone listens to music on YouTube because the hits and goldies are there and It’s Free !!! If it’s available and it’s free.. it’s like it’s gold raining down from the heavens..

    Most independent operators in the recorded music business still make their livelihood from iTunes.

    The huge conglomerates have sweetheart deals (business arrangements) with people like Spotify and do very well out of it..

    Reply

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