U.S. Music Sales Flat, But Digital Music Sales Soar

March 28, 2012

“Sales of digital music climbed sharply both internationally and especially within the United States, which is consuming more and more digital music even as total music revenues remain flat.

Both the International Federation of the Phonographic Industry and the Recording Institute of American Artists (RIAA) released their reports for the international and American music industry, respectively. Globally, music revenues fell by 3 percent to $16.6 billion, according to Billboard, which obtained a copy of the report.

The RIAA reported that total U.S. music revenue was flat, climbing just 0.2 percent to $7.01 billion. But that contrasted sharply with the IFPI’s own numbers, which put the figure at $4.37 billion.

Total U.S. music shipments in 2011 were up for the first time since 2004, Joshua P. Friedlander, the RIAA’s vice president for strategic data analysis, reported.

Digital music sales, meanwhile, climbed 8.0 percent to $5.23 billion, according to the IFPI. Within the United States, the total digital music revenue rose 17.3 percent to $2.62 billion, the RIAA said.

The number of digital MP3s and digital albums sold within the United States rose by 10.9 percent and 22.1 percent, respectively, the RIAA said.

“The 2011 music industry shipment data confirms that digital music has truly become mainstream, though there are certainly still challenges presented by massive volumes of digital theft,” Friedlander wrote. “Half of industry shipments came through digital channels in 2011, and digital downloads – hardly a new format anymore – have continued growing. More than 100 million digital albums were sold in a year for the first time. Access models like subscription services and Internet radio (represented by digital performance royalties) have continued to grow both in popularity as well as in their revenue contribution to the industry. No longer just a niche, digital music has shown it can be a model – or perhaps more accurately a variety of models – for the music industry going forward.”

Sales of music via kiosks plunged, however, dropping 18.3 percent to 1.4 million units ($3.3 million in revenue) and the number of music videos sold dropped 11.6 percent, to 16.3 million units.

Mobile music bombed, too: 115.9 million tracks were sold via mobile, down 38.5 percent; revenue dropped a comparable amount to $277.4 million. Subscriptions, however, were a bright spot. Although just 1.8 million users signed on, that represented an 18.9 percent growth rate.

The decline of 7.7 percent by total revenue in physical formats was primarily accounted for by an 8.5 percent revenue decline in CD shipments, the RIAA said. Although still only 2 percent of the overall market, vinyl albums continued to grow in 2011, up 34 percent versus the prior year to $119 million, with more than 5 million units shipped. ”

Source: eCoustics