Digital sales exceed 50% of total music shipments for the first time ever
The Recording Industry Assn. of America released its year-end tallies for 2011 on Tuesday, showing total music shipments up for the first time since 2004, however slightly, with digital sales exceeding 50% of total music shipments for the first time ever. Subscription services also showed significant growth.While acknowledging that the music business commanded less than half the total value it did in 1999, the RIAA’s veep of strategic digital analysis Joshua P. Friedlander noted that total shipments for last year increased 0.2% over 2010 for a total shipment value of $7 billion. Overall physical music values were down 7.7%, a smaller decline than in years previous, while digital sales grew by 9.2%. Digital formats accounted for just slightly more music sales in 2011, taking a majority share of the market for the first time. (Last year, digital accounted for 46% of the business.) In addition to the overall increase, the digital market continued to expand, with shipments coming from more nontraditional formats than in years previous. One of the most closely watched newer sectors of the business over the past year, music subscription services (including the likes of Spotify, Rdio and MOG) showed a 18.9% rise in total paying subscribers, totaling 1.8 million, and a revenue spike of 13.5% for a total of $241 million. Total digital downloads were up 17% to $2.6 billion, with digital album downloads breaking the 100 million unit barrier for the first time, generating $1.1 billion in sales, up 25%. Digital singles downloads were up 13.3% in value for a cume of just under $1.5 billion. CD sales continued to slide, with shipment totals down 4.8% to 240.8 million units, and value down 8.5% to $3.1 billion. Digital performance royalties, which includes SoundExchange payments for webcasting, satellite radio and “non-interactive music services,” rose 17% to $292 million. Last year marked the first year that digital performance royalties exceeded the sales of mobile products such as ringtunes and ringbacks, which fell at a rate of 39% and 28%, respectively. Synch royalties were up 4.1% to $196.5 million. The biggest single percentage increase, by far, took place in that most old-school of formats, with vinyl singles rising 99.6% to a total of $4.6 million. Combined with a 34% rise in the value of LP/EP shipments, vinyl accounts for 2% of the RIAA’s totals. Using figures reported to the RIAA by record labels, the org’s tallies measure the value of shipments at recommended or estimated list price rather than the actual sale price.