DOUBLE TROUBLE
July 11, 2009/Billboard
Digital Album Sales Growth Slows In Q2, As CD Decline Continues To Accelerate
ED CHRISTMAN
U.S. recorded-music sales were hit with an unwelcome double whammy in the second quarter, as slowing growth in digital album sales added to the misery of an accelerating decline in CD sales.
During the six months ended June 28, combined U.S. sales of albums and track-equivalent albums (or TEA, where 10 tracks equal an album) totaled 235.8 million units, down 8.9% from 258.9 million during the same period last year, according to Nielsen SoundScan. That marked a steeper decline than the 4.7% fall recorded in the first half of 2008, when album and TEA sales fell to 258.9 million from 271.6 million a year earlier. Album sales minus TEA fell 14.7% to 174.5 million during the first half, widening from an 11% decline during the year-earlier period.
CD sales in the second quarter dropped 22.3% to 65.2 million units from 83.9 million during the same period last year, according to SoundScan. That’s worse than a 20.2% fall in the first quarter, when sales fell to 70.5 million from 88.6 million, and a 16.4% decline in second-quarter 2008. CD sales fell 21.2% in the first half, according to SoundScan.
Meanwhile, digital album sales grew just 14.9% in the second quarter to 18.5 million units from 15.9 million in the corresponding period of 2008, slowing markedly from 22.6% growth in the first quarter, when sales climbed to 19.5 million units from 15.9 million a year earlier, and 32.7% in the second quarter of last year. Year to date, digital album sales were up 18.9%.
Taylor Swift’s “Fearless” (Big Machine) is the top-selling album in the United States so far this year with 1.3 million copies, according to SoundScan. Only two other albums scanned more than 1 million copies in the first half, matching last year’s tally of three million-sellers in the first six months of the year: the “Hannah Montana: The Movie” (Walt Disney) soundtrack and Eminem’s “Relapse” (Web/Shady/Aftermath/Interscope), which have each sold 1.2 million.
Digital track sales increased 13% during the first half of the year to 613 million units, from 542.6 million a year earlier, slowing sharply from growth of 30% in the year-earlier period. So far this year, 28 digital tracks have passed the million-unit milestone, with Flo Rida’s “Right Round” (Poe Boy/Atlantic) leading the pack with 3.5 million units. By contrast, only 19 tracks had reached 1 million downloads in the first half of 2008.
The current decade accounted for the overwhelming majority of digital track sales. The 500 million downloads attributed to songs from albums released in the 2000s make up 81.6% of overall track downloads in the first half. Meanwhile, tracks from albums released in the ’90s account for 57.8 million units, or 9.4% of track downloads, while the ’80s account for 25.5 million units, or 4.2% of scans; the ’70s for 19.4 million units, or 3.2%; the ’60s for 8.2 million units, or 1.3%; and the ’50s for 1.3 million units, or 0.2%.
Sales of current albums—those that are within the first 18 months of their release or older albums that stay in the top half of the Billboard 200 or are active at radio—remained weak, falling 17.3% to 95.4 million units in the first half of the year from 115.4 million in the corresponding period of 2008. Sales of catalog albums—titles that are older than 18 months and don’t meet any of the other current-title qualifications—fell 11.4%. As a percentage of overall album sales in the first half, current titles accounted for 54.7% of sales while catalog accounted for 45.3%.
Among genres, Latin has had the toughest year so far, with album sales down 33% in the first half to 9 million units, from 13.4 million units a year earlier. R&B, which includes hip-hop, continued its steady decline, with album sales down 18.5% to 32.3 million units, from 39.6 million during the same period last year. Sales of rock albums fell 10%, outperforming the overall album sales decline of 14.7%, as sales fell to 60 million units from 66.6 million a year earlier.
At the other end of the spectrum, country albums slipped only 2.8% from a year earlier, buoyed by strong sales generated by Swift’s “Fearless” and Rascal Flatts’ “Unstoppable” (Lyric Street), which sold 825,000 copies in the first six months of the year.
Nontraditional retailers appeared to be the lone bright spot among store sectors, posting a sales increase of 6.5% in the first half from the same period a year earlier. But most of that was attributable to digital download stores. The rest of the nontraditional sector, which includes concert sales, online CD vendors and merchants like Starbucks and Toys “R” Us, suffered a 17.8% decline in the first six months of the year, with album sales falling to 13.2 million units from 16.1 million a year earlier.
Chains like Trans World, Best Buy, Borders and Newbury Comics were down 20.9%, while mass merchants like Target and Wal-Mart were down 22.5% and independent stores were down 16%.
