[JPL] Digital music sales top physical sales

Dr. Jazz drjazz at drjazz.com
Thu Jan 5 17:42:44 EST 2012


NEW YORK (CNNMoney) -- The times they are a-changin'. For the first time 
in history, digital music sales topped the physical sale of music.

According to a Nielsen and Billboard report, digital music purchases 
accounted for 50.3% of music sales in 2011. Digital sales were up 8.4% 
from the previous year, while physical album sales declined 5%.

Lady Gaga took the top spot as 2011's most streamed artist, according to 
the report. The most streamed song of 2011? Nicki Minaj's "Super Bass," 
with 84.9 million audio streams and 71 million video streams.

Adele's album 21 was the top selling album both online and physically, 
and her popular song, "Rolling in the Deep," was the bestselling digital 
song, with 5.8 million downloads.

Digital album sales ended the year on a high note, with a record 3.5 
million sales in the last week of 2011.

The record industry can thank Adele for reviving the idea of buying 
entire albums. For the first time since 2004, total album sales -- 
counting both physical and digital -- rose compared to the prior year. 
They increased 1.3% in 2011 to 331 million units. Adele's 21 sold 5.8 
million units, enough to lift the entire album catagory into postive 
territory for the year.

While services like Napster blazed the trail for online music 
consumption, offerings like Apple's 99-cents-a-song iTunes catalog as 
well as those from a host of startups have broken down traditional 
music-purchasing barriers. Most customers now prefer shopping online to 
buying in a store.

"Clearly the plastic format was not an optimal format for selling 
music," says Brian Zisk, executive producer of the SF MusicTech Summit. 
"It's a much healthier ecosystem for folks to be selling digital formats 
instead of physical formats. That's the future, and the way it's going."

Zisk also cites the rise in mobile and smartphones as a catalyst behind 
the digital-music surge.

"The ability for folks to purchase music everywhere has really expanded 
the digital marketplace," he says. "They don't need to go to physical 
store -- anywhere the phone is people are able to purchase music."

Traditional music magazines like Rolling Stone and Spin Magazine have 
now created apps that allow users to purchase music while browsing, and 
services like Spotify have partnered with Facebook to boost music 
discovery and sharing.

Mike More, CEO of Headliner.fm, says the future may not be digital 
sales. More cites Spotify's model as the music consumption of the 
future, where he says more consumers will pay for access to music 
streaming services rather than purchasing songs.

"I think you have a whole generation who doesn't care if they own 
anything," he says. "Accessibility has become paramount. This is what 
consumers want -- they want it everywhere and on all their devices."  To 
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First Published: January 5, 2012: 2:10 PM ET

Dr. Jazz
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