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Album sales plunge in '07 as digital growth slows
01/03/2008 7:00 PM, Reuters
Dean Goodman
If only Christmas came a few times
a year for the fast-fading U.S. music industry.
Total album sales plunged 15 percent in 2007, and retailers
waited until October for the year's top release, California
tenor Josh Groban's holiday-themed "Noel," according to sales
data issued on Thursday by industry tracker Nielsen SoundScan.
Sales of physical and digital albums tumbled to 500.5
million units, as the music industry was pillaged by piracy and
competition from other forms of entertainment like videogames,
industry experts said.
It marked the lowest tally and the steepest decline since
Nielsen began publishing estimates based on point-of-sales data
in 1993, a spokeswoman said. The peak year in that time was
2000, when sales reached 785 million units.
Album sales on the Web rose 2.4 percent to 30.1 million
units, but that was down from a 19 percent jump in 2006.
Overall sales -- including albums, singles, and digital
tracks -- rose 14 percent to 1.4 billion units, also down from
a 19 percent rise in 2006. The main driver of growth was a 45
percent jump in digital track sales to 844.2 million units. But
even then, the pace slackened from 65 percent in 2006.
Things are likely to get worse for the next four or five
years, said music attorney Kenneth Kraus, a Nashville-based
partner in Loeb & Loeb, whose clients include Kid Rock and
Carrie Underwood.
He said the music industry wasted too much time and
goodwill battling digital distribution of music, and "we've
lost a whole generation of kids" who grew up downloading free
music from the Web and cannot fathom paying for it.
"Maybe it's going to be another five years" before the
music industry comes up with a viable pricing plan that allows
fans to download songs with no copying restrictions, he said.
THE LAST NOEL?
Groban, who records for Warner Music Group Corp, sold 3.7
million copies of "Noel" and topped the U.S. charts for five
weeks. The No. 2 album of 2007 was Walt Disney Co's soundtrack
to the Disney Channel TV movie "High School Musical 2," with
3.0 million units. Its predecessor was the biggest release of
2006 with 3.7 million units.
As an indicator of how far the business has fallen, Mariah
Carey topped the 2005 list, selling almost 5 million units of
"The Emancipation of Mimi." The top album of 2004, R&B singer
Usher's "Confessions," sold nearly 8 million copies that year.
Universal Music Group, a unit of France's Vivendi Universal
SA, was the top distributor with 31.9 percent of total album
sales, up from 31.6 percent in 2006.
Sony BMG Music Entertainment, a joint venture between Sony
Corp and Bertelsmann AG, was second in market share with 25
percent, down from 27.4 percent in 2006. Warner Music Group
Corp was No. 3 with 20.3 percent of the market, up from 2006
when it had 18.1 percent.
London-based EMI Group Plc., which was acquired by buyout
firm Terra Firma Capital, was last among the "big four" major
labels with a 9.4 percent market share, down from 10.20 percent
in 2006. The label's new owners have warned artists they could
be dropped if they do not work hard enough for their money.
The United States is the world's top music market,
accounting for about one-third of sales, according to the
International Federation of the Phonographic Industry (IFPI), a
London-based group that represents the major record labels.
(Reporting by Dean Goodman; Editing by Bob Tourtellotte)
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