It’s a moment that many tech industry observers have predicted for the best part of a decade: the US music market is now more digital than physical, by volume at least.
According to figures from Nielsen SoundScan and Billboard magazine, digital music unit sales accounted for 50.3 per cent of all music purchases in 2011, the first time that threshold has been crossed in the world’s largest music market.
The US is more advanced in digital than most of Europe. In the UK, figures this week showed that digital albums still account for less than a quarter of the market, although downloads of individual tracks far outstrip CD singles.
One in three albums is digital in the US, while Americans bought 100m more digital tracks overall in 2011 than the prior year, up 8.4 per cent. Rap, electronic, latin and even country albums saw the biggest increases in US digital album sales, outpacing the overall average growth of 20 per cent.
But in spite of the digital growth, there are signs that the decline of CDs is slowing. Total album sales were up for the first time since 2004 and physical album sales fell 5 per cent in 2011, significantly less than the 19.5 per cent decline reported in 2010 over the prior year.
Says music analyst Mark Mulligan of the flip from physical to digital dominance:
“This is obviously an important milestone, but it is as much of a reflection of how much the total market has declined as it is of how strongly digital is performing. In this context, the big slowdown in CD sales decline is important, though … we are looking at volumes so heavy discounting will affect revenues more markedly.”
Mr Mulligan says that around 25 per cent of music fans are now buying digital, “way ahead of many European territories”. “So these figures show the US consolidating its role as the most powerful digital music market but also raise questions about why other markets aren’t performing as strongly digitally.”
But while it’s the biggest, the US is not the first global market to make the shift. For the real leaders in digital music, look to Asia, where digital sales in China, Indonesia, South Korea and Thailand overtook physical back in 2009, according to the IFPI.
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