Digital Music Sales Went Down for the First Time Ever…

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Digital music sales are down. Streaming numbers and vinyl sales have increased.

Both digital tracks and digital albums saw a decrease this year, according to Nielsen SoundScan.

Digital track sales fell 1.34 billion in 2012 to 1.26 billion in 2013, a 5.7 percent decrease. Digital album sales fell from 117.7 million in 2012 to 117.6 million in 2013, a 0.1 percent decrease.

Presumably, streaming has taken a bite out of digital sales. Nielsen SoundScan hasn’t released yearly streaming numbers yet, but audio and video streams in the first half of 2013 were 24 percent higher than the first half of 2012.  Executives are reportedly claiming that streaming income has made up for the loss in digital sales.

Overall album sales went down 8.4 percent this year. CD sales went down 14.5 percent. Vinyl sales increased 32 percent to 6 million.

31 Responses

  1. GGG

    Uh oh, Yves has some splainin to do…

    Interesting numbers, though. Would have thought albums would drop more than singles but I guess singles are at a much greater height to fall from. Also probably has something to do with so many singles being so disposable and forgettable outside their 15 minutes of popularity. Why buy some shit single you’ll just not care about in 3 months when you can stream it 20 times.

    • Me

      For what it’s worth, it says digital track sales, not singles. There is a difference.

      Anyways, the lighter decrease in album downloads and bigger decrease in track downloads means if this is the beginning of the transition the album format taking back popularity from the singles/individual track format. Just another phase in the cycle?

      • GGG

        Yes, it’s what I meant. A ‘single’ transaction.

        It could be a shift back to album listening, and I certainly hope so. But most of me just thinks it’s people not wanting, consciously or unconsciously, to pay for the soulless pop hit of the day they’ll forget about by the time the next one comes around when they can just go to youtube until they lose interest.

    • Yves Villeneuve

      Just read the news, though the numbers differ by 2mm less to what Billboard reported in their year-end tallies during their weekly album and singles chart article.

      Digital sales for the rest of the music industry took a nosedive as soon as the iTunes Radio launch took place. Non-interactive radio is not the same as interactive streaming, though the RIAA kind of lumps them together.

      Streaming is only up 24% at this year’s halfway point. iTunes Radio may have bumped that number up by year-end to last year’s final growth of 59%. Without iTunes Radio, the RIAA streaming categories would have seen a 60% decline in growth year-over-year. If the trend continues, will streaming actually flatline or decline in 2014?

      • Yves Villeneuve

        Correction in first paragraph. Scratch that. Found the missing 2mm.

    • TuneHunter

      Whole industry cheerfully marching in to the streaming swamp!

      • Maugarz

        100% Agree! Just a bunch of brainless artists acting as music executives that cant actually see beyond their nose.

        • TuneHunter

          I don’t know if the are artists but for sure they are being paid to dismantle their own business..
          I am curious what kind of psychology, drugs or payola is behind it!
          They have killed Napster and now, 12 years later, they are co-owners of Spotify and Veevoo turbo-Napsters!

  2. x1

    Streaming Revenue 2012 for USA: $1,032.8 million USD (up 59%)

    It’s possible that streaming might reach $1,500,000,000 USD in 2013

    It’s the fastest growing segment of recorded music.

  3. FarePlay

    The stupidest argument of last year.

    There’s no proof that Spotify erodes the sale of recorded music.

    • Anonymous

      The question isn’t if Spotify erodes the sale of recorded music. But if the the decline of the sale of recorded music is offset by the increase in revenue from streaming.

      • GGG

        Well, there’s two different questions here. Can it make up for sales on the whole for the industry and can it make up on an artist by artist basis. Important distinction, specifically based on the long-tail discussion. Because for the former, I think it does by a long shot. The latter is where you’ll see issues for people until streaming is more normalized, because you’ll get a small batch of hits responsible for a huge percentage of plays, i.e. the long tail is shit out of luck for the time being.

        Instead of completely blindly speculating I’ll just put that Spotfiy says they had 4.5B listening hours, or 270B minutes, this year. Let’s say an avg song is 3.5 mins, minus commercial time, carry the one, divide by pi, that’s….quite a bit more than 15B streams.

  4. SM

    I bet $100 that Nina Ulloa doesn’t even have an iTunes account to buy music.

    Music “experts” and “gurus” who don’t buy albums tell you what to do with your career and business.

    So pathetic.

  5. Garth Soshahi, CEO- AAMPP

    A combination of purchased music (singles/albums) and streaming will determine this years number and we will know what those figures are in January of 2015.

  6. Anon

    What was once the ‘album’ is now the ‘playlist’ Ownership is now history.

      • Yep

        Nope. Fact. Not now, but in 5 years time nobody will buy physical music. FACT.

        • Yves Villeneuve

          The growth in Spotify streaming and other similar services in the USA are already dropping very hard. There are countless inactive streamers unwittingly subscribed to music/telecom bundles.

          There are known and/or unknown extenuating circumstances why digital and physical album/track sales declined in the latter half of 2013.

          Keep in mind, I don’t have a problem with streaming services as long as people aren’t forced into a lifetime commitment because there isn’t any music to own outright. Subscription is like leasing and costs to consumers should be higher.

          The first sentence is pretty much fact.

          • Yep

            Downloads are now sliding in the USA. Streaming is rising. My label has seen a 250% increase from January 2013 to this month. At that rate in 2 years we could exist on that revenue alone. We’re based in the UK, so it seems like the ‘Northern European’ thing is spreading from mainland Europe to the UK.

            It’s a very positive sign for the future of our business. Once ‘The Beatles’ go live with the catalogue and a Spotify app, things will explode. Believe me.

          • Yves Villeneuve

            You may have seen an 250% increase in revenue but certainly not the same in the number of streams. Personally, my conscience prevents me from screwing customers that never intended to be customers.

          • David

            …over 200% increase in streams as well. We are actively participating in streaming. We build releases for streaming services, we are working on Spotify apps. Streaming is the future whether you like it or not. If you want people to hear your music in 10 years time, you better get involved!

          • cjhoffmn

            Interesting. A few thoughts and questions:
            It is an encouraging sign that labels are finding a way to make revenues through streaming. Innovation as people configure their companies to earn those revs is key toward new models and survival.
            But, earning revs is one thing, earning a profit from them (so you can stay in business without raising capital) is another. Have the costs of production and marketing fallen so much as well, so that the revs you’re making lead to profits?

            Part of this debate is the wager that losing money now on this model will lead to future profits. If there are labels that are successfully navigating this and earning profits (including their costs to create and build the company) then we might see the path to a new sustainable future. If those labels are *also* wagering, like Spotify, that losing profits now to make more later, well then, there is still much to know before we know about what will survive in 10 years.

  7. John Ward

    The clinging to vinyl by some punters fascinates me…The real truth about vinyl sales is largely buried, because I suspect the majority of sales are second hand…. just look at the activity on eBay for example… and perhaps the Music Biz needs to look at what is happening there and take note:
    LPs have hung around for many reasons, much debated and argued about, but the fact is, they are still here. LPs are being purchased by a growing niche group (including myself) who are prepared to pay relatively large sums to own LPs. Their reasons are a mix of nostalgia, sound quality considerations, the “package”, a desire to own original masters rather than largely hideous remasters…. etc..
    On the digital side, perhaps the Music Biz might take on board what has happened to LPs and adapt the digital market in a similar way: For example, there is definitely a market for proper HD audio, i.e. 24 bit and uncompressed. This currently exists, but is limited and could be expanded.
    There is also clearly a market for “original” masters. Digital remasters are often taken from anything other than the original studio master since lots of those are damaged or lost. Remasters are frequently horrible anyway due to excessive compression / limiting and “disco smile” EQs being applied…
    Record companies could sell HD transcriptions of good first LP pressings… they could be recorded on a transcription turntable, perhaps the ELP laser player that reads LPs with lasers, no physical contact with the record and hence no issues such as tracking error, stylus / arm inertia, stylus / disc wear etc… these could be sold as HD downloads or CD “LPs”. There is a market for this… I teach students who mostly have only ever heard digital remasters. They are gobsmacked when they hear the original masters on LP versions….

  8. FarePlay

    How wonderful that more people are discovering and purchasing vinyl every year. For those of us familiar with the format, we understand the special relationship one has with the ritual and ambiance of owning and playing vinyl. No question that the purchase of recorded music can be far more profitable for the artist than radio airplay, touring or sales of merchandise. To see Beyonce as a top selling artist with sales of a few million albums is a small fraction compared to what an artist of her stature would have sold before digital distribution.

    I do not believe the steady growth of vinyl sales is a fad, but rather a deep appreciation and validation that music plays an important part in our lives. The main reason I spend a significant amount of my personal time here and other places speaking out on behalf of working artists.

  9. hippydog

    I would have to do some major searching but I think this was predicted last year, and the primary fault was NOT streaming..
    DIGITAL sales for awhile was an upward trend, BUT When you looked at the trend of “Music Sales” (digital + physical) they were on a continuous downward spiral, IE: digital sales kept the graph from being an outright plummet..

    the thing is, even the digital sales were NOT a steady growth, it looked more like a bell curve type thus at some point it would logically plateau..

    Having said that, the cannibalization of sales seems to have turned out to be a definite result as each new “format” becomes ‘status quo’..
    IE: initially the new format adds to the sales as consumers ‘double up’, but then the new format replaces sales of the old format..

    and as people have been saying..
    if the new ‘format’ does not give the same profit margin as the ‘old’ then you end up with a loss..

    for me, the big question is: can streaming compete enough with the ‘bittorrent format’ to compensate for its much lower profit margin?