January 4, 2013 1:00 am

US album sales lose some of their rhythm

US album sales slipped back last year after registering their first modest growth for seven years in 2011, raising fresh questions about the impact of subscription streaming, cloud services, online music video sites and internet radio stations on consumers’ music purchases.

Data from Nielsen SoundScan showed a 4 per cent fall in album sales for 2012, from 331m units to 316m, as CD sales fell faster than in 2011 and growth slowed in downloads from digital stores led by Apple’s iTunes.


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Digital sales of individual songs hit a record 1.34bn tracks, but the growth rate slowed from 8.5 per cent to 5 per cent.

The SoundScan figures, reported by Billboard, can be swung by a few hits, with some artists attracting more digital consumers and others appealing to CD loyalists. They also exclude non-download revenues from digital services such as iHeartRadio, Pandora, Rhapsody, Spotify and Vevo,which are accounting for a growing portion of total revenues for record labels.

Spotify said in December that its payments to labels had doubled to $500m in nine months, as subscriber numbers grew to 5m globally, including 1m in the US. Vevo, the music video site, has paid the industry $200m since 2009, and Pandora spent $182m on content in the first nine months of 2012, up 80 per cent.

The RIAA, a recording industry trade body, said last week that subscription, mobile and digital performance royalties accounted for $800m in sales in 2011, or 12 per cent of the $7bn US music market, “and that contribution is likely to continue rising”.

“We’re all eager to reach a moment in time when that data [on newer revenue streams] is more readily available throughout the year,” said Jim Donio, president of NARM, the music business association.

Mr Donio said the growth in song downloads was “particularly significant” after the first full year of streaming services such as Spotify being available in the US. A record 55.7m digital songs were downloaded in the last week of 2012, as people cashed in music gift cards.

CD sales fell 13 per cent in 2012, worse than 2011’s 6 per cent decline, but CDs still accounted for the majority of US album sales. Digital downloads, up 14 per cent in contrast to the 20 per cent growth seen in 2011, rose from 31 per cent of the total to 37 per cent.

Vinyl records saw a fifth year of growth, up 18 per cent, but the total 4.55m vinyl sales – a record since SoundScan launched in 1991 – were less than 1.5 per cent of the market.

Adele’s 21 topped the album charts for a second year, while Gotye’s Somebody That I Used to Know was the biggest digital track with 6.8m downloads. Country singers, led by Taylor Swift, accounted for five of the top 10 albums.

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