Music Purchases Surge to 1.5 Billion in 2008!

Yahoo! is reporting the 2008 Nielsen/SoundScan music sales numbers for the music industry.  In a world full of record unemployment, reduced consumption, crashing stock markets, housing market declines and war, is it really any surprise that the world is turning to music for comfort?  Yes, music purchases INCREASED 10.5% in 2008 versus 2007 according to this report.

The link above will provide the spreadsheet view of these statistics, but if you want the Top 5  points about this recording breaking music sales years, here they are in no particular order for your consumption:

1. Digital Albums OUTSOLD Physical Albums sold over the internet by over TWICE as much (65.8M vs 27.5M). The general trend is that the online sales of physical albums (CDs mostly) was down 8.6% over 2007, while Digital Albums sales reached a new record in 2008 and was up 32% over 2007.   Bottom line is, if you had your new CD and the same new album digitally on Amazon, the average here is stating that you were likely to sell more than TWICE as many digital vs. physical online.

2.  One bright spot in the physical sales stats here was good old VINYL. The report states the vinyl album sales nearly doubled from the 1m purchases during 2007 to 1.8M in 2008.  These are PURCHAES, not sales volumes.  Maybe that limited edition, signed and numbered idea has merit after all (and profit too). The top selling vinyl album in 2008 was Radiohead’s In Rainbows which sold 25,800 copies. A distant second was The Beatles Abbey Road with 16,000 copies.

3.  This report is focused on the 1.5 billion music purchases – not sales.  The vast majority of those purchases?  Digital Music Tracks equated for over 1,070,000,000 purchases during 2008, which set a new record and grew 27% over the 844M purchases in 2007. The top selling digital album for 2008 was Coldplay’s Viva La Vida which sold 617,000 times with Jack Johnson’s Sleep Through the Static a distant second with 325,000 digital album purchases.

4.  Nielsen uses three ways to categorize Albums based upon its age; Current, Catalog and Deep Catalog. We will not spend time here in this summary to get into all the details, but we mainly want to convey this; Of the three categories for DIGITAL albums, the one with the strongest growth during 2008 was Deep Catalog, up 41% over 2007.  Current Digital  Albums were up 27% and Catalog Digital Albums were up 37%.   I think this clearly conveys that its not just the new “current” music that is being purchased digitally. Digital albums grew to represent 15% of total album sales in 2008, after representing 10% in 2007 and just 5.5in 2006.

5. The Digital field gets wider:

• 2005: only two songs sold more than 1 million digital copies.
• 2006: 22 songs sold more than 1 million digital copies.
• 2007 : 41 songs sold more than 1 million digital copies.
• 2008: 71 songs sold more than 1 million digital copies.

With Apple’s recent decision to remove DRM copy-protection from iTunes tracks, it’s not hard to predict over 100 tracks will sell more than 1 million copies during 2009.  Will yours be one of them?

Finally, I find it odd that the Nielsen “factoids” section goes to lengths to mention that Metallica’s Death Magnet was the number one selling Internet Album (a physical disc being sold by an online store) with 144,000 units sold. But FAIL to mention that they sold more digital copies of the same album (158,000) but Metallica was at the bottom of that top 10 digital album chart.  Why is that newsworthy or “Factoid” worthy to Neilsen?

-pjc