Album sales slump, iTunes booms

January 1, 2009

US album sales fell 14% in 2008 as consumers instead chose to buy individual tracks online, such as the top-selling “Bleeding Love” by Leona Lewis.

Album sales fell to 428.4 million from 500.5 million a year earlier, market researcher Nielsen SoundScan said today in an e- mailed statement. Online sales of individual tracks from stores such as iTunes topped one billion for the first time, rising 27%, Nielsen said.

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 Group last month reported fiscal 2008 sales fell 2% after adjusting for currency changes.

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

Total US music purchases in 2008 rose 11% to 1.51 billion units on surging online sales. Music companies such as Warner count on digital revenue from downloads and ring tones to counter Internet piracy and shrinking demand for CDs.

Digital album sales rose 32% to 65.8 million, slower than the 53% rise in 2007. Lewis’s “Bleeding Love” was the best-selling digital song, with 3.4 million in sales, Nielsen SoundScan said.

This year’s best-selling album was Lil Wayne’s “Tha Carter III,” which sold 2.87 million copies, Nielsen SoundScan reported. Carter records for Vivendi SA’s Universal Music Group, the world’s largest record company.

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 Music Entertainment, Warner Music and EMI Group, competes with Apple’s iTunes and Inc.

Posted by Ted • Thursday, January 1, 2009 .