Claire Atkinson NY Post 10/11/13
Call it the Pandora effect.
Music fans across the US are likely to buy fewer digital tracks this year than last year — the first time sales of singles will decline since the dawn of the download.
In the first nine months of the year, sales of digital singles fell 3.4 percent from last year, to $974.5 million, according to Nielsen SoundScan.
And the decline seems to be picking up steam as third-quarter sales slipped about 6 percent.
The decline comes as the popularity of streaming services like Pandora, Rdio and Spotify explodes.
Through the first half of 2013, streaming volume soared 24 percent over the same period in 2012, according to the semi-annual entertainment report from Nielsen Entertainment’s senior vice president David Bakula.
“Streaming continues to be a tremendous growth story with over 50 billion audio and video streams in the first six months of 2013,” he said.
In 2012, royalties paid by streaming services to rights-holders, which are in line with the amount of music streamed, grew 58 percent, to $462 million, according to the Recording Industry Association of America.
This year’s totals are expected to far exceed last year’s numbers.
Streaming music, for most listeners, is free. With the growth of smartphones, it is also just as accessible.
“In general I think you should include Vevo in that mix,” Richard Tullo, an analyst at Albert Fried & Co, told The Post. “They’re hot as a pistol.”
Vevo, launched in 2009, is a free ad-supported online music video destination owned by Universal Music Group and Sony Music. It delivers 3 billion views a month via its YouTube channels — and about half its content is consumed on mobile devices.
Music Week magazine noted that even with the help of Lorde’s “Royals,” taking the charts by storm, digital single sales last week were off some 15 percent compared with those of last year.
In the third quarter, sales of digital singles were off 6 percent, to 292.4 million.
Album sales aren’t faring any better.
The RIAA is anticipating a huge revenue growth in streaming services that deliver music as part of an On Demand experience such as Spotify’s all-you-can-eat offering and digital radio services such as Pandora, iHeart and now Apple’s iTunes Radio.
While a hot fourth-quarter could turn things around, one optimistic music company veteran said they’re expecting nothing better then a flat year.
In 2012 the “access” models recorded $1 billion in revenues, or 15 percent of total revenues — up from 3 percent in 2007.
In Europe, subscription and ad-supported revenues combined account for 31 percent of all digital music revenues, according to the International Federation of the Phonographic Industry.