Thursday, July 04, 2013

Sky falls in as US digital sales drop for first time in recorded history

Every on the deck! Nielsen are reporting that the number of digital downloads sold in the US are falling:

For the year to date as of June 30, digital track sales have declined 2.3% to 682.2 million units from the 698 million units that tracks scanned in the first half of 2012, according to Nielsen SoundScan.

In the first quarter, track sales declined 1.34% to 356.5 million from the 361.3 million. In the second quarter the decline more than doubled to 3.3%, with track sales totaling 325.7 million units this year versus 336.7 million in the second quarter of 2012.
Hang about, hang about, put away your Lars Ulrich Was Right t-shirts, and take a breath.

First of, downloads are now competing for attention with streaming, which is going to have an impact.

But there's more than simply a drift to Spotify here - as Billboard explains:
Getting back to the softness in tracks, the decline can be attributed to a 20 million unit decrease in catalog sales, which at the mid-year point fell to 366.7 million units from the 386.9 million units that were scanned at the mid-year 2012. Meanwhile, current track sales grew slightly to 315.5 million from 311 million units.
So, as we saw with CDs, there comes a point when the mass rush to buy music already owned on a different format starts to fall away. That new songs are still selling well is pretty good news.

And there's... something else:
But with the decline in catalog sales, it’s more likely that the decline is due to the growing popularity of complete my album features at download stores, and the possible repricing of catalog sales up to 99 cents and $1.29 price points from the 69 cent tracks that was rolled out to catalog song titles when iTunes first embraced variable pricing in 2009.
Shock! Digital music tracks respond to pricing changes according to very basic laws of supply and demand!

You may now put on your Alfred Marshall Was Right t-shirts, and go about your business.