The music industry decked its halls with lower case i’s last year, brightening spirits with the knowledge that a song is just the spin of an iPod wheel away. It suggests 2006 will be the year the major labels finally use the Internet to not only break an artist, but do so with singles rather than albums.
In the week that led up to Christmas Day, the industry posted its biggest ever digital sales week as 9.6 million songs were sold. And it is highly likely that when the final numbers are tallied for 2005, almost 340 million songs will have been sold as digital downloads, a figure that does not include complete albums sold digitally. Last year, the first full year in which digital downloads were tracked by Nielsen SoundScan, 135 million were sold.
The record industry, which historically moves as slowly as lines at the DMV, might use the year’s data to bolster Internet strategies, rethink the numbers and release dates for greatest hits collections, aim for hits across multiple genres and view the month of December as wide open for superstar releases.
It’s almost a certainty that the numbers of releases and artists on rosters will continue to be cut as the numbers just don’t pour in like they used to. And once again, diskeries will be pressed to make the case that they are working with consumers and not against them.
Last year was marked by backfiring strategies that have consumers wary — payola allegations, the music biz flooding the end of the third quarter with new releases, Sony BMG’s inclusion of spyware on CDs and now a probe into digital price-fixing. But the Big Four labels clearly convinced consumers that purchasing downloads legally is a win-win for both sides.
With numbers available for 51 weeks of the past year, 2005 album sales were down for the sixth year in a row. Decrease was at 7% from 2004 –602.2 million units compared to 650.8 million, counting albums sold as CDs and downloads.
But the music industry will likely put a much more positive spin on 2005 by calculating a far smaller decrease in sales, figuring that every 10-12 song sales constitute an album. Using that math, “album units” would top 632 million and constitute only a 3% dip. Prior to the advent of digital downloads, sales of singles were negligible and going the way of vinyl 45s.
In 2003, the fourth quarter salvaged the record industry, but 2004 saw a flaccid final stretch trim the year’s healthy lead — about 8% — to nil.
This year’s fourth quarter was about as distressing as it gets as not one of the 11 sales weeks between Oct. 3 and Dec. 18 spiked upward. Since mid-November, five of the six weeks were down 10%-11% from 2004.
The week of Christmas and the start of Hanukkah, however, saw a healthy boost as 33 million albums were sold, representing a 2% jump from the same week in 2004.
When 2005’s sales figures are wrapped up, Universal Music Group will again be No. 1, commandeering almost 35% of all music sales, followed by Sony BMG at about 28%, Warner Music Group near 16% and EMI at 9%-plus.