Executives Blame Streaming Music for Drop of Digital Music Sales
According to Nielsen SoundScan, sales of digital tracks fell from 1.34 billion units in 2012 to 1.26 billion in 2013, a drop of 5.7%. Digital album sales also fell 0.1% to 117.6 million, down from 117.7 million units the year before. The industry wasn’t surprised by the dip in digital per-track performance after three quarters of weak sales according to the publication but the drop for full-albums was somewhat unexpected given a strong start in early 2013.
Just as they had underestimated the power of digital music sales years before, industry executives appeared to once again be unwilling to cede ground to a new format, this time in the form of ad-supported or subscription Internet streaming services. Earlier in 2013, these people were reportedly reluctant to accept that Internet radio was cannibalizing digital sales according to a report from Billboard.
Executives apparently struck deals beneficial enough to offset the slip seen by digital sales instead of being caught off guard. The actual results have yet to be revealed as SoundScan hasn’t released its streaming numbers for 2013. The overall breakdown of album sales market share for 2013 saw CDs leading with 57.2%, followed by digital at 40.6% and vinyl at 2%. Cassettes and DVDs made up 0.2% of all album sales.
When Apple’s iTunes Store (previously the iTunes Music Store) opened its digital doors in 2003, it quickly became a popular alternative to brick-and-mortar music stores. Driven by a massive installed iPod, PC and Mac user base, iTunes took over as the number 1 music seller in the US in 2008 and was the biggest in the world by 2010. Apple ended up fielding its own streaming service in iTunes Radio which was originally announced alongside iOS 7 at last year’s WWDC. Much like other streaming solutions, iTunes Radio is free to use with advertising support. iTunes subscribers who pay $24.99 per year can listen to the service ad-free.