Album sales drop 3.2%

LONDON — A strong release schedule and the growth of digital sales helped U.K. record labels exceed market expectations last year, according to trade body the BPI.

Overall, the British industry saw sales of 133.6 million albums — a volume decline of 3.2% compared with 2007 — 138.1 million — but that was far better than many analysts predicted, with some forecasting a slide of more than 10%.

Indeed, the BPI end-of-year figures state that the digital albums market grew strongly during 2008, with 10 million sales representing a 65% increase compared with 2007. The digital format accounts for 7.7% of the U.K. albums market.

The news was even better in the singles market, with 2008 being the biggest sales year on record in unit terms. That was driven mostly by download sales and overall more than 115 million singles were sold across all formats — a 33% increase on 2007’s 86.6 million tracks.

BPI chief executive Geoff Taylor said: “Every business and consumer in the U.K. is having a tough time, and these difficult trading conditions make the resilience of the U.K.’s music market all the more notable. During a recession, people look for purchases that are excellent value for money and bring a lot of enjoyment, and music does just this.

“The challenge for music companies in 2009 is to ensure that artist investment continues to remain profitable, as the way consumers discover and enjoy music continues to go through a period of unprecedented change.”

The biggest selling album of the year was Duffy’s “Rockferry,” which sold nearly 1.7 million units, closely followed by Take That’s “The Circus” (1.4 million), Kings of Leon’s “Only by the Night” (1.2 million), Leona Lewis’ “Spirit” (1.1 million) and Coldplay’s “Viva La Vida” (1 million).

In terms of singles, the best seller of the year was Alexandra Burke’s cover of “Hallelujah,” the winner of ITV talent show “The X-Factor,” which sold close to 900,000 units by the end of December. Singing along with her “X-Factor” finalists, Burke also had a claim to the second-highest selling single, the charity record “Hero,” which sold more than 750,000 units. Third highest was Duffy’s “Mercy” (535,000), followed by Katy Perry’s “I Kissed a Girl” (479,000) and Nickelback’s “Rockstar” (469,000).

A strong final quarter release schedule — The Killers, Now 71, Pink, Girls Aloud, Oasis, Snow Patrol and Take That — meant that the U.K. albums market actually performed better year-on-year than the same period in 2007, up by 0.9%.

Kim Bayley, director general of the Entertainment Retailers Association, commented: “The fact that U.K. retailers sold more albums in the fourth quarter of 2008 than in 2007 is particularly striking. Given that they did so against the background of the collapse of Entertainment U.K., a wholesaler supplying around 40% of U.K. unit sales, is a real testament to the work put in by retailers and record companies to put in place alternative supply arrangements.”

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