Summary:

For the music industry, even the good news these days comes with a dose of negativity. Labels have pinned their hopes on online music sales…

For the music industry, even the good news these days comes with a dose of negativity. Labels have pinned their hopes on online music sales as a countervailing force against the inexorable decline of CD purchases. But the rate of growth appears to have stalled dramatically in 2007, according to Nielsen SoundScan U.S. figures: digital download sales were up 53 percent in 2007 hitting the 50 million mark; in 2006, download sales gained 101 percent. These numbers come within the context of a drop of overall music sales of 9.5 percent and a 15 percent decline for albums alone. Similar to the slowdown of online ad spending growth, the law of large numbers is largely responsible for this dynamic. Nevertheless, it’s worth pointing out that album downloads accounted for 10 percent of total album sales compared to 5.5 percent in 2006. Nielsen’s digital numbers also showed:

Online sales of physical albums: Similar to downloads, sales of physical albums via e-commerce sites also shows abrupt signs of slowing. In 2007, 30.1 million CDs were bought at online outlets, up a fairly meager 2.4 percent compared to 2006’s robust 19 percent growth.

Individual songs: In 2007, download sales of individual tracks were up 45 percent, while 2006 sales in that area rose 65 percent. <a href="http://www.businesswire.com/portal/site/home/index.jsp?epi-content=NEWS_VIEW_POPUP_TYPE&newsId=20080103006104&ndmHsc=v2*N1196859600000*O1199453462000*DgroupByDate*W2*Y1*A1000837*Z2007%20U.S.%20MUSIC%20PURCHASES%20EXCEED%201.4%20BILLION%20&newsLang=en&beanID=202776713&viewID=news_view_popup&quot; t

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