What the Heck Happened to Track Sales?

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(From Billboard Magazine, October 11, 2013) Last week, individual track sales in the United States hit the lowest weekly total of 2013. A total of 19.8 million units were sold, 15% lower than the same week in 2012. To put it into perspective, normal weekly track sales in 2013 have been around 25 million and broke 28 million earlier in the year. However, slipping track sales is nothing new for 2013. Sales were fewer than 23 million in July, and weekly sales fell below 22 million units one week in September, 7% lower than the same week in 2012.

Numerous factors are playing a part in the decline of individual track sales. Some music companies believe music streaming is impacting track sales tremendously. Many active music fans are engaged in some sort of on-demand streaming music service thus changing the way they purchase and listen to music. Another factor influencing the decline of track sales is the popularity of releases. Through October 6th, sales of the top 20 songs are down 5.3% compared to this time last year. Popular songs just aren’t resonating with music buyers as much as they were in 2012.

The growing popularity of Android could also explain the decline of sales. Rob Wiesenthal, Warner Music Group’s Chief Operating Officer, tweeted last week that music download growth is slowing in part “because of consumer shift from iOS to Android.” It just so happens that evidence exists to support this claim. iOS users spend more on apps than Android according to a study by AdTruth. Another factor in the slowdown of sales is the fact that the United States market hasn’t attracted new digital download buyers. The number of Americans that purchased a single track or digital album has remained steady at 44 million from 2010 to 2012. Every year there are more music services urging people to purchase digital downloads, but they don’t seem to be reaching new markets.

The streaming music industry is in a state of flux and better off than it was a year ago while digital track purchases are on the decline. Industry professionals might want to keep an eye on this issue when making music business decisions regarding digital track download revenues in the future.