Digital Music Sales in U.S. Decrease For First Time in 2013

February 8

For the first time since the iTunes store opened its doors, the U.S. music industry finished the year with a decrease in digital music sales.

Here are the facts for the full year 2013, according to Nielsen SoundScan:

Digital track sales fell 5.7% from 1.34 billion units to 1.26 billion units
Digital album sales fell 0.1% to 117.6 million units from the previous year’s total of 117.7 million

How were sales of physical albums?

The CD declined 14.5% to 165.4 million units, down from 193.4 million in the prior year
Vinyl continued its upward trend with sales increasing to 6 million units from the 4.55 million the format tallied in 2012

Overall, album sales suffered an 8.4% decline, dipping to 289.4 million units from nearly 316 million units in 2012.

Where is the reason for that decrease? Most likely, it is in the consumer's growing appetite for streaming music. Ad-supported and paid subscription services are gaining popularity and this results in digital sales decreases.

While Nielsen SoundScan has not yet released its annual streaming numbers, so far industry executives have been reporting that the growth in streaming revenue has been offsetting the decline in digital sales revenue.

The take-away from the above trends, on our opinion, is this:

Offering your music via download and CD remains the strongest part of your selling strategy. However, in a world of widely available high-speed internet and cloud-based interconnected devices, you must be (getting) prepared to offer your music streaming.

Stay tuned for our upcoming discussion on how to get your music out there via streaming!