Bloomberg: U.S. Album Sales Decline 14% While Online Track Sales Surge

By James Callan
December 31, 2008

Jan. 1 (Bloomberg) — Lil Wayne’s “Tha Carter III” was the best-selling album of 2008, a year in which total album sales fell 14 percent as consumers continued to buy single songs online, such as top-seller “Bleeding Love” by Leona Lewis.

Total U.S. music purchases rose 11 percent in 2008 to 1.51 billion units, driven by online spending. Album sales fell to 428.4 million from 500.5 million a year earlier, researcher Nielsen SoundScan said yesterday in an e-mailed statement.

Online sales of individual tracks from stores such as Apple Inc.’s iTunes topped 1 billion for the first time, rising 27 percent, Nielsen said. Music companies such as Warner Music Group Corp. count on digital revenue from downloads and ring tones to counter Internet piracy and shrinking demand for CDs.

“We’re moving towards the inevitable digital environment,” Ted Cohen, a Los Angeles-based media and entertainment consultant with TAG Strategic LLC, said in an interview. “Whether it’s on a cell phone or a computer, people now want instant access to music.”

Nielsen tracks unit purchases, not dollar sales of music. With spending going more online and consumers cutting their purchases of compact discs, industry revenue has declined. Warner Music last month reported fiscal 2008 sales fell 2 percent after adjusting for currency changes.

Digital album sales rose 32 percent to 65.8 million, slower than the 53 percent rise in 2007 and not enough to counter the drop in CD sales. Over the past two years, album sales have declined 27 percent.

Top Sellers

Lil Wayne’s “Tha Carter III,” sold 2.87 million copies, Nielsen SoundScan reported. Carter records for Vivendi SA’s Universal Music Group, the world’s largest record company. Lewis’s “Bleeding Love” was the best-selling digital song, with 3.4 million in sales, Nielsen SoundScan said.

Universal’s album market share was 32 percent, while Sony BMG Music Entertainment came second with 25 percent, both virtually unchanged from 2007.

Warner Music’s market share increased more than 1 percentage point to 21 percent, helped by Kid Rock’s “Rock N’ Roll Jesus.” EMI Group Ltd., controlled by Guy Hands’s Terra Firma Capital Partners Ltd., had a market share of 9 percent, down from 9.4 percent a year earlier.

In September, News Corp. redesigned its MySpace music Web site to sell downloads in a joint venture with the major record labels. The site, which shares revenue with Universal Music, Sony BMG, Warner Music and EMI, competes with iTunes and Inc.

To contact the reporter on this story: James Callan in New York at

Posted by Ted • Wednesday, December 31, 2008 .