U.S. Digital Music Sales Plateau in First Half of 2010

[MacRumors]

Reuters reports on data from research firm Nielsen showing that U.S. digital music sales plateaued in the first half of 2010, marking a dramatic decrease from the 28% growth enjoyed just two years ago.

According to research group Nielsen, digital sales were flat in the U.S. market after a 13 percent increase from 2008 to 2009 and 28 percent growth from 2007 to 2008.

Nielsen points to a variety of factors, including economic uncertainty, a lack of appeal for new releases, and confusion over digital sales options as possible reasons for the leveling off.

Apple has long dominated the digital download market in the U.S. and many other countries, consistently registering on the order of 70% of digital industry sales and now exceeding a quarter of all music sales. Consequently, a plateauing of digital music sales growth set against a backdrop of stagnating overall music sales suggests that Apple may have a difficult time growing its iTunes music business in the U.S. if the trend continues, given the company's already-high market share. Data from Apple's announced milestones for iTunes music sales already reveals a leveling off at around 250 million downloads per month.

Some hope may remain in international markets, however, as Nielsen notes growth in digital music sales in a number of other countries.

According to the Nielsen research, digital music sales were up 7 percent in Britain, up 13 percent in Germany and up 19 percent in France.

Apple has also become less reliant on iTunes Store music sales for driving hardware purchases as the company's media devices have become more capable, allowing the company to branch out into applications, movies, and TV.

Article Link: U.S. Digital Music Sales Plateau in First Half of 2010

 

[miles01110]

Nielsen points to a variety of factors, including economic uncertainty, a lack of appeal for new releases, and confusion over digital sales options as possible reasons for the leveling off.

How about the reality that the focus has shifted to video and away from music? That seems like a relevant factor as well.

 

[AustinJamMan]

does this take into account subscription services such as Pandora and Rdio? I rarely buy music any longer because I can subscribe for less than the cost of one album per month and sync unlimited content to my mobile devices. Why buy the cow....

 

[Lostanddamned]

Personally, I'm still on CD's. I have a huge (~600 disc) collection and I don't feel ready to take the dive to purely digital.

I like the idea that I could (with a lot of work) recover all my music after a total fail of my computer.

 

[allpar]

Has anyone noticed a major recession, or massive shifts in jobs away from the United States? Might be a factor. I'd assume also that now that most Americans seem to have an iPod, that most people have filled theirs up and are now at the "album now and then" stage.

 

[notjustjay]

a lack of appeal for new releases

Yeah, I'm not really interested in Justin Bieber or Lady Gaga either.

 

[Superdrive]

As mentioned above, I've built my library with classics. When the production companies start kicking out stuff worthy of the "Classic" title, I'll continue buying.

 

[kr11048]

growth

Perhaps the nearly 30 percent less growth has something to do with the fact that they jacked up prices about 30% from .99 to 1.29 on iTunes. 30 cents may not seem like much more, but it takes a significantly better song to make me fork over the extra 30% of my hard-earned cash.

 

[miles01110]

Yeah, I'm not really interested in Justin Bieber or Lady Gaga either.

I have now determined you are somewhere above the age of 13, male, and do not listen to pop radio with any frequency. Sidechannel data mining ftw...

 

[ten-oak-druid]

Everyone has bought the good classic rock already and there isn't enough good music to drive up sales.

 

[Mattie Num Nums]

Thats because music these days is garbage.

 

[mattwolfmatt]

Personally, I'm still on CD's. I have a huge (~600 disc) collection and I don't feel ready to take the dive to purely digital.

I like the idea that I could (with a lot of work) recover all my music after a total fail of my computer.

I have 5500 songs, or the equivalent of about 550 CDs, I guess, in my itunes library. I'm so glad I don't have CDs - I have everything I need at my fingertips on my computer. I can even burn CDs from what I have if I want.

I'm a music teacher, so it's important my music collection is organized and well-cataloged. iTunes takes the place of a huge database, which was a pain to keep organized and up-to-date.

I have my music and pictures backed up twice - once on an external hard drive, once to another laptop which I keep off site. I'm all safe, except for a nuclear attack on my city. In that case, I won't care much about my music, I suspect.

 

[ten-oak-druid]

Personally, I'm still on CD's. I have a huge (~600 disc) collection and I don't feel ready to take the dive to purely digital.

I like the idea that I could (with a lot of work) recover all my music after a total fail of my computer.

Same here. I had imported all my CDs at 198kbps over the years. Well some were lower than that from the early days. Recently I started reimporting everything at 256kbps. It isn't too much work. You put a stack next to the computer and work on it while multitasking. It went surprisingly fast.

And the better CDs have recording dates so you don't have to rely on flawed databases for the year field.

I do buy through itunes but I reserve that for individual songs that I would have no interest in purchasing the entire album. The download takes the place of the single (45rpm lol)

 

[HERO XXL]

Was it a "convenient" mistake or merely a choice to omit piracy as another contributing factor?

 

[dethmaShine]

Ever heard of android?

Android is majorly responsible for this.

 

[mBox]

Was it a "convenient" mistake or merely a choice to omit piracy as another contributing factor?

stating the obvious. I cant see how the music business can avoid piracy.

 

[allpar]

Was it a "convenient" mistake or merely a choice to omit piracy as another contributing factor?

I think there's an assumption piracy remains at a constant rate. Though removing DRM from the music may have had an impact.

 

[BornAgainMac]

I think the 1.29 price increase was a factor. I upgraded my entire library to DRM free iTunes music when it was possible and probably just purchase a song or two a month on average from this point on.

 

[JoEw]

99 cents was the perfect price for music.

1.29 is ********!

Music sales have declined since the introduction of tiered pricing.

 

[WiiMarioHacker]

You know why it may be piracy?

Because the Government told us we don't OWN the music. (So what's the point of paying. Paying = You Own It. Or at least that what the rule was)

 

[flopticalcube]

You sound like a bunch of old farts. "if it ain't from my generation, it's crap!"

 

[notjustjay]

I have now determined you are somewhere above the age of 13, male, and do not listen to pop radio with any frequency. Sidechannel data mining ftw...

That's amazing!

In seriousness, I think the last few albums I bought from iTunes were classical or soundtracks.

 

[Žalgiris]

Thats because music these days is garbage.

You still call it music, how dare you.

 

[AlphaBob]

Inevitable result...

This is the inevitable result of traditional record labels interfering with the natural growth of digital downloads by insisting that prices increase from $0.99 to $1.29, by preventing useful and practical distribution of music through the cloud, and by doing their best to intentionally fragment the market to avoid any one player dominating.

With portable devices like the iPhone, and music available in many ways (like YouTube or Vivo), maybe people are no longer interested in owning overpriced music that is difficult to obtain?

My belief is that digital downloads were the last hope of traditional record labels which have killed the goose that lays the golden egg.

 

[WiiDSmoker]

I think we are all in agreement that the price increase has been the deciding factor; I know it has for me.