WSJ: Music sales take sharp plunge

Apple Store“In a dramatic acceleration of the seven-year sales decline that has battered the music industry, compact-disc sales for the first three months of this year plunged 20% from a year earlier, the latest sign of the seismic shift in the way consumers acquire music,” Ethan Smith reports for The Wall Street Journal.

“The sharp slide in sales of CDs, which still account for more than 85% of music sold, has far eclipsed the growth in sales of digital downloads, which were supposed to have been the industry’s salvation,” Smith reports.

Smith reports, “In recent weeks, the music industry has posted some of the weakest sales it has ever recorded. This year has already seen the two lowest-selling No. 1 albums since Nielsen SoundScan, which tracks music sales, was launched in 1991. One week, ‘American Idol’ runner-up Chris Daughtry’s rock band sold just 65,000 copies of its chart-topping album; another week, the ‘Dreamgirls’ movie soundtrack sold a mere 60,000. As recently as 2005, there were many weeks when such tallies wouldn’t have been enough to crack the top 30 sellers. In prior years, it wasn’t uncommon for a No. 1 record to sell 500,000 or 600,000 copies a week.”

“The music industry has been banking on the rise of digital music to compensate for inevitable drops in sales of CDs. Apple’s 2003 launch of its iTunes Store was greeted as a new day in music retailing, one that would allow fans to conveniently and quickly snap up large amounts of music from limitless virtual shelves,” Smith reports. “It hasn’t worked out that way — at least so far. Digital sales of individual songs this year have risen 54% from a year earlier to 173.4 million, according to Nielsen SoundScan. But that’s nowhere near enough to offset the 20% decline from a year ago in CD sales to 81.5 million units.”

Smith continues, “Meanwhile, with music sales sliding for the first time even at some big-box chains, Best Buy has been quietly reducing the floor space it dedicates to music, according to music-distribution executives. Whether Wal-Mart and others will follow suit isn’t clear, but if they do it could spell more trouble for the record companies. The big-box chains already stocked far fewer titles than did the fading specialty retailers. As a result, it is harder for consumers to find and purchase older titles in stores.”

Full article here.

MacDailyNews Take: Not to sound like a broken record, but when consumers have the ability to buy only the good tunes and are no longer forced to buy a CD full of filler crap, where’s the surprise in these numbers and trends? Hey, I like that song! Now it costs 99-cents instead of the $15 for the full CD of yesteryear. There’s a main reason for the sales decline. Here’s an idea: make more good songs and less bad ones (and stop with the DRM B.S. and think about upping the audio quality for legal online tracks while you’re at it) and you’ll probably sell more songs.

[Thanks to MacDailyNews Reader “Tommy Boy” for the heads up.]

Related articles:
62% of music industry execs think eliminating DRM would increase music download sales – February 14, 2007
Disney film sales via Apple’s iTunes Store rise sharply; over 1.3 million sold in first three months – February 02, 2007
Apple’s iTunes Store passes two billion songs milestone; 50m TV shows & over 1.3m movies sold – January 09, 2007
Apple iTunes visits skyrocket 413% on Christmas Day – December 27, 2006
comScore: Apple iTunes sales are surging; revenue grew 84% during first 3 quarters of 2006 – December 14, 2006
Piper Jaffray: Apple iTunes Store sales show strong year-over-year growth – December 13, 2006
Warner’s Middlebronfman sees strong growth from iTunes Store sales – December 01, 2006

74 Comments

  1. In spite of MDN’s take and the views of many commenters here whenever this subject comes up, there’s a HUGE amount of piracy going on. It’s absolutely rampant, and not just with teenagers. People just want stuff for free and couldn’t give a shit about the record companies (fair enough!) or the musicians (NOT fair enough).

    I do agree, though, that most of today’s music is crap. But it seems that kids’ tastes in music has declined to match it.

    So this item is absolutely no surprize to me.

    Signed, one grumpy old muso.

  2. critic, you’re absolutely right. Music sales are down because there isn’t much but CRAP out there and that has been the case for years, my god, when Idol winners are suddenly the biggest music sellers out there, you have a problem, but hey, it gives the RIAA another excuse to blame others for their own problems… which is the America way in the last 20 years…

    sad.

  3. Apple have just been quietly continuing to build their iTunes business around the world. As Apple’s share of worldwide music sales continues its inexorable rise, and now with Apple TV shipping this week there will be mounting pressure on the movie studios to agree to a deal with Apple.

    There is no doubt that Apple have been able to see exactly how to apply technology to this marketplace, well in advance of anyone else. Steve Jobs is driving a juggernaut!

  4. I stopped pirating when the iTMS came out. In fact I replaced a lot of my most listened to pirated songs with iTunes versions. Why? Because I am willing to pay for good music so long as I dont have to buy a $18 dollar CD that only contains a couple good songs.

    Note to music industry. Stop producing crap. People will buy more.

  5. Apple could easily leverage the record companies even more by creating an area in iTunes where the average musician could upload their song or songs for free, meeting requirements in arrangement, time, and content.
    Then, any person could get their stuff heard without having to have a record contract. The popular downloads would then get record companies attention and they could find talent alot easier rather than digging through mountains of CD’s.
    Imagine the talent wasted over the years because of the hassles of getting your music heard.
    Easy solution…if you can upload a podcast, then why can’t you upload a song if it meets iTunes requirements? Free to upload and free to download…it would start a whole new industry, college kids would eat it up, and the record companies could still be picky and choosy and get the music and talent they want. I disagree with ads on iTunes, but in this area, ads and/or adwords could be there to justify cost.

  6. Does anyone blame the lousy music sales on the lousy music that is out there now? MTV does not serve up talented musicians as radio once did.

    When you hire bands and singers based on how much they look like hot fashion models, you get music fashion models would probably make if you let them.

    The music industry should blame itself for letting MTV’s video sex images dictate what music is offered to the public. It’s not the talent or musicianship of bands anymore.

    People might watch the suggestive half nakked video but they won’t buy the shitty music that was in the background of MTV’s soft porn video showcase.

  7. BTW-
    I seldom buy from iTunes, just the strays that I can’t track down. I also don’t pirate more than maybe 10 songs a year-that being from friends so I can check something out.

    I do buy between 30 and 50 CDs a year. New and reissues.

    Matter of fact, I got Corinne Bailey Rae last night at Target (for the girlfriend) and she did a cover of Zep’s “Since I’ve Been Loving You”. Now that was not expected, and I totally enjoyed it.

    I love it when artist take chances on what they FEEL, not what producers say will sell.

    Vive le Artic Monkeys!

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