Digital stores now leading source for album sales

Edna Gundersen USA TODAY 01/24/13

Digital services like iTunes have moved ahead of Walmart, Target and other mass merchants as the leading seller of albums, while the CD continues to fade away

Story Highlights
For the first time, digital stores sold more albums than Walmart and other mass merchants
Digital services such as iTunes sold 37% of albums in 2012
CDs are fading from retail, but vinyl is on the rise, up a record 19%

Music’s digital revolution may not be your father’s vinyl shop, but it’s not only a youth quake anymore.

The takeover has spread so widely that in 2012, for the first time in history, digital stores became the primary outlet for buying albums, eclipsing mass merchants that had been the leading sales sector for the previous five years.

And booming digital sales this month suggest the shift is broadening more dramatically.

“As the days tick by, more people get accustomed to experiencing music digitally,” says Keith Caulfield, Billboard’s associate director of charts/retail. “At the beginning of January, we used to see a huge surge of physical album sales (from cash gifts). Now everyone has iTunes gift cards, and moms and grandparents got their first iPads and iPhones. So Grandma is downloading that Susan Boyle album.”

In the album format, digital jumped 6% in 2012, though fans still favor the physical version. Last year, 193 million CDs were sold vs. 118 million digital albums, according to Nielsen SoundScan’s year-end data report. While album sales at digital services outpaced those at mass merchants, they were far exceeded by the combined sales of physical albums at all outlets.

The breakdown in total album sales:

•Digital services such as iTunes and Amazon MP3: 37%
•Walmart, Target and other mass merchants: 29%
•Best Buy and similar chains: 15%
•Non-traditional outlets such as Amazon physical sales, mail order, venue and fan club sales: 10%
•Indie stores: 7%

Adele’s 21 was the year’s top-selling digital album with 1.04 million copies, trailed by Taylor Swift’s Red with 863,000 and Mumford & Sons’ Babel with 778,000. Digital sales fell far short of CD sales: 21 sold 3.37 million copies, and Red sold 2.24 million.

CDs, costlier than downloads, have been allotted less shelf space at Best Buy, Target and other chains, speeding digital’s rise, Caulfield says.

“Digital has been consistently growing, and that’s to be expected as we progress away from physical purchases and further into streams and music that nobody actually owns,” Caulfield says. “It’s a natural transition. Nobody’s buying eight-tracks anymore.”

And yet the LP comeback is flourishing. While only a sliver of the musical pie, vinyl rose 19%, reaching 4.6 million copies in 2012, breaking the 2011 record of 3.9 million.

“The most old-fashioned way of experiencing music continues to grow every year,” Caulfield says. “A lot of people still want something tangible



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