Nielsen Survey Shows Drop In Digital Music Downloads

Single Sales Down, Album Sales Up

Overall sales of digital downloads seems to have hit a plateau of sorts in the U.S., as Single-track sales stopped growing and stalled at 630 million tracks, according to data released by NIELSEN. Digital music sales for the first half of 2010 is down 0.7% from the same period a year earlier.

Music sales on the digital side have been slowing for two years. Sales gained 13% in the first six months of 2009 over the previous year and 28% the previous year over 2007, NIELSEN reported.

"The digital download's ascendancy has been curbed," wrote NIELSEN.

THE NEW YORK POST reports, "The dip is bad news for a host of parties, including APPLE iTUNES, which has 70% of the music-download business and accounts for 28% of total music market sales. It's also worrying for the music labels, which now derive around half of their total revenue from digital-music sales."

The NIELSEN survey noted that 48% of NORTH AMERICANS would not pay for music content online.

STANDARD & POORS Tech Analyst SCOTT KESSLER told THE POST that sales of iPODS are down as other APPLE products such as iPADS and iPHONES have grown. Worldwide sales of APPLE's iPOD fell 6.3% through APPLE's fiscal third quarter ended in JUNE. "Companies are focusing more on user experience and distribution, rather than content itself and if that is an overarching theme, it's probably not something compelling for content providers," said KESSLER.

NIELSEN did have a bit of good news for the music labels, as "more people are buying albums, instead of single tracks. NIELSEN SOUNDSCAN statistics through SEPTEMBER, show a 13% rise in digital album sales year-on-year," wrote THE POST. One prominent digital music executive explained, 'The overall digital market [albums and tracks] is up 4.6%, while current tracks [new releases] are up 5.2% and catalog is down 4.6% year-to-date. The dollar volume looks better if there's a shift from tracks to albums and that's good for artists.' Also, other music executives say a decline in track volume doesn't necessarily correspond to a decline in revenue, due to variable pricing that sees tracks sell for as much as $1.29."

[What do you think is the cause of music downloads stalling? Is the price fair? Is the quality of the music as good as ever? Share your opinion below.]

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