Digital Sales Don't Make Up for CD Sales Slump

International Musician, Aug 2007

US sales of digital music albums grew by 60% in the first six months of 2007, but that figure still did not offset the sales decline of CDs, according to data from Nielsen SoundScan.

Total sales of albums were down by 15% for both digital and CDs, with CDs alone falling 19.3% to 205.7 million units. Meanwhile, digital album sales jumped about 60% to 23.5 million units, a sign that the recorded music industry is struggling in the transition to digital formats and that CD sales are declining faster than expected.

On the global scene, the recorded music market fell for the seventh consecutive year in 2006, and the slide is accelerating in 2007, according to figures published by music trade group International Federation of the Phonographic Industry (IFPI).

Sales fell 5% year-over-year to $19.6 billion, said IFPI, which represents the major record labels. Digital formats accounted for 11% of total global shipments in 2006, compared with 2% of the overall pie in 2004.

On the positive side, record labels' income from performance rights collections in 2006 improved 8% to $728 million. "We believe this sector has tremendous potential," IFPI Chairman and CEO John Kennedy said.

And despite the global decline, 12 countries posted growth in their respective recorded music markets during the year.