Nielsen’s Numbers are Mixed for 2008

Today, The Nielsen Company released 2008 numbers for the music industry based on its point-of-sale data collection operations. For distressed music execs, the news was both good and bad.

First, the good news – overall music sales increased by more than 200 million units, representing a 10.5 percent increase over 2007. The industry has enjoyed growth in this category every year since 2005 and this is the 4^th consecutive year that consumers have purchased more than one billion units of music, including albums, singles, videos, and digital tracks.

The digital side also saw more growth. Digital tracks broke a new record, with over one billion sold for the first time ever. Specifically, 1.07 billion tracks were sold in 2008, representing a 27 percent increase over 2007. Digital album sales also reached a new high with 65.8 million units sold, a 32 percent increase over 2007.

Now, the bad news – overall album sales, which includes all albums and track equivalent albums, fell to 535.4 million units in 2008, representing an 8.5 percent decline from 2007. Total album sales, which include CD’s , cassettes, vinyl albums, and digital albums, also dropped 14 percent in 2008, with 428.4 million units sold.

On a surprising note, vinyl saw an increase this year. In fact, more vinyl albums were purchased in 2008 than in any other year since Nielsen SoundScan started paying attention back in 1991. Consumers purchased 1.88 million LP’s in 2008, a whopping 89 percent increase over 2007.

Aside from vinyl, the figures don’t really offer any revelations this year that we haven’t heard before. Digital is slowly replacing vinyl sales, though not at the pace necessary to sustain the record sales volume in the 1990’s. Single sales are also replacing album sales, due to the dominance of the single format at online retail stores like iTunes and Amazon mp3.

While all of this sounds like a poor outlook for those weary execs, the figures show a silver lining: music consumption is still up. Music fans have an ever increasing appetite for more music. It’s just that they consume it differently than in years past. Rather than buying a CD at the local music store, fans now look for a different consumption experience. They go to MySpace to directly connect with artists they love, watch videos on YouTube, purchase a few tracks on Amazon, build streaming radio stations to find similar tunes at Pandora, and more.

No singular business model will replace the sales of 90’s, but several approaches that create an experience and connection to fans can add up. And the original approach to reach fans is touring. No one can pirate the live experience of seeing an artist on stage - performing their heart out, sweating under the lights, and making fans scream for more. ArtistForce provides the tools to get the most from touring. The marketplace connects agents and promoters with artists and managers. Artists can promote the strengths of their live shows with video, audio, photos, bios, and more. From there, offers can be made, tracked, and finalized into contracts – all within the site. The process is streamlined and simple, saving time and money for everyone involved. We all want strong numbers. ArtistForce can get you there.      

You can read Nielsen’s full report here.

Check out Pollstar’s article on the figures here.