Physical asset declines are driving the larger recording industry downturn, though a digital deceleration is also causing concern.
For the first three months of this year, digital sales topped 218.7 million units, a seemingly healthy gain of 51.9 percent over sales of 144.0 million during the same period last year. But that compares unfavorably to an aggressive gain of 87 percent recorded during the first quarter of 2006, according to figures published by Nielsen Soundscan. Measured by straight unit increases, the comparison shows a relatively flat growth curve. The first quarter of this year witnessed a gain of 74.7 million units over comparable, year-ago figures, while the 2006 period saw a increase of 67.0 million from sales of roughly 77 million recorded during the first quarter of 2005.
Meanwhile, holiday iPod sales during the recent holiday quarter hit an all-time high of 21 million units, a jump of 7 million over holiday, 2005 figures of 14 million. But the devices, normally a catalyst for paid download increases, have failed to create a monstrous jump this year. During the final week of 2006, digital sales actually multiplied eightfold when compared to the year-ago period, though that surge proved unsustainable.
From a broader perspective, annual paid download percentage gains are also slowing. For 2006, paid downloads topped 581.9 million, a gain of 65 percent over a 2005 tally of 352.7 million. The 2005 total represents a 147 percent increase over 2004 totals.