RIAA Releases 2005 Shipment Numbers: Album Shipments Down 3.9%
March 31, 2006 at 9:28 AM (PT)
The RIAA today released its full-year retail shipment data for 2005. The overall approximate retail value of the industry, when combining shipments of physical products to various outlets with the estimated value of various digital revenue streams, was $12.27 billion in 2005, compared to $12.34 billion in 2004 (note: the 2005 figures include some categories not collected in 2004, such as mobile, digital subscription, digital music video, and kiosks). The wholesale value equivalent of the music industry in 2005, when combining both digital and physical revenues, is $7.0 billion.
Overall album shipments, when including both physical and digital albums (albums plus individual full-length tracks divided by 10), were 794.7 million in 2005, a 3.9% decline from 2004 (note: albums include all full-length formats including video).
The number of overall physical units (CDs, DVD videos, cassettes, etc.) shipped to retail decreased by 7.6% when compared to 2004. Counting all formats and all distribution channels, overall unit shipments of physical product decreased by 8% in 2005. The decrease is based on 749 million total units shipped in 2005, compared to 814 million in 2004. The suggested retail value of all physical products shipped to various outlets was $11.2 billion, a 7.9% decline from 2004. The wholesale equivalent was $6.4 billion in 2005, a 9% drop from 2004.
Mobile formats (such as ringtones, ringbacks and other artist-related content) shipped 170 million units, which represents $421.6 million in retail value. Additionally, some 1.9 million digital music videos were sold online, for an estimated retail value of $3.7 million.
Sales of digital singles grew by 163% (as did the retail value) -- from 139.4 million units in 2004 to 366.9 million units in 2005. Full-length digital album shipments grew 198.5 percent, from 4.6 million units to 13.6 million. Subscription services also continue to gain traction in the marketplace: approximately 1.3 million music fans subscribe to a service (with a total suggested retail value of $149.2 million). According to data from The NPD Group, 4.2% of Internet-connected households used a legal online music service in DECEMBER 2005, an all-time high.
"The music community has pivoted hard to the digital age, and fans are the true beneficiaries," said RIAA Chairman and CEO MITCH BAINWOL. "We have transformed the way we do business and deliver music to consumers. The ways fans can enjoy music -- and the ways the industry can recognize a return on its investment -- have never been greater: download and subscription services, mobile phone content, enhanced value CDs, burn-on-demand kiosks, digital radio services. We are working hard to deliver consumers the music they love in the formats they want.
"At the same time, we recognize the very real challenges that continue to plague our ability to invest in the next generation of music," BAINWOL continued. "The Supreme Court's unanimous Grokster decision was extraordinarily meaningful, but the theft of music in its various forms continues to exact a heavy price. The emergence of new digital radio platforms, while exciting and holding great potential, present new challenges if allowed to morph into download-like services without commensurate compensation."