Midway through 2012, Nielsen SoundScan numbers show album sales down 3.2%, and the question is: What does that mean?
On the one hand, a decline is a decline, and the obvious answer is that the U.S. music industry can't sustain the positive album sales growth of 2011. But the drop is modest in comparison to the numbers in the United Kingdom, where total album sales plummeted 13.8% (according to data from British labels trade group BPI). And there may be some reasons to remain optimistic (see story, page 6).
A close examination, though, reveals another statistic behind that modest drop: For the first time since the advent of SoundScan in 1991, catalog albums scans exceed current album scans. Likely budget-priced albums are claiming ground from higher-priced front-line titles. This stat also points to a long-brewing shift in consumer buying habits away from album sales to cherry-picking hit songs (and, worryingly, digital track sales - an area of steady growth in 2011 - have declined year over year).
Last year things looked different: Total album sales for 2011 grew 1.4% to 330.6 million units, the first annual album growth since 2004, according to Nielsen SoundScan. The decline in CD sales slowed to a mere 5.7% drop from the 18%-20% downward pace of 2006 through 2010, with digital growth powering overall album sales into positive territory. This year's return to the red appears to be due to a renewed acceleration. CD album sales racked up a six-month total of 91.1 million units, a double-digit drop of 11.8%, down from the 101.3 million units scanned in the first half of 2011.
There continues to be some good news on the digital side, as album scans in that format jumped 13.8% in the first six months of 2012, up to 57.2 million units from 50.3 million at last year's midpoint. But digital track growth slowed 5.6%, to 698 million units from 660.8 million, when that tally represented a 10.6% increase over the 2010 first-half total.
So far this year, two digital songs have passed the 5 million unit mark: Gotye's "Somebody That I Used to Know" (featuring Kimbra), with scans of 5.5 million, and fun.'s "We Are Young" (featuring Janelle Monáe), with scans of nearly 5.1 million. Reflecting the softer year for digital tracks, only 47 tracks tallied more than 1 million units in the first half of the year, with 15 selling more than 2 million. Compare this with the first half of 2011, when 53 titles had hit the 1 million mark, and 17 had passed 2 million units.
In the market-share derby, Universal Music Group retained the top spot among distributors, finishing the first half with 30.2%, despite getting a scare in the first quarter by Sony Music Entertainment, which finished the six-month mark with a 29.9% share in albums plus TEA (track-equivalent albums, where 10 tracks equals an album). Warner Music Group comes in third with 18.4%, while EMI placed fourth with 10.1%.
UMG's market share rose thanks to its placement of eight albums in the year's top 20 at the midway point, including 2012's No. 2 seller, Lionel Richie's "Tuskegee." Sony Music claimed half of the spots in the top 10, but only has one more in the top 20. Of course, Sony's presence at the top was led by Adele's 21, the No. 1-selling album of the year with 3.7 million units, bringing its total to 9.5 million.
Catalog album sales grew 5.4%, while current titles were down 10.8%. That means catalog makes up 50.9% of total sales (76.6 million units, up year over year from 72.6 million), with current accounting for 49.1% of scans totaled (73.9 million, down from 82.8 million). Compare this with first-half 2011, when current titles led catalog with 53.3% of the total.
Or compare it with 2000, when current albums comprised 66.9% of total sales. By 2005, that spread had narrowed to current at 62.9% and catalog at 43.9%. But this year marks the first time catalog sales are in the lead.
But in the lead by a hair's breadth: 1.8 percentage points separate them. Last year at the halfway point, current titles accounted for 53.3% of album scans versus 46.7% for catalog albums. By year's end, fall and fourth-quarter releases had pushed current albums ahead by another percentage point. If the slate of upcoming albums lead by releases from Green Day (see story, page 14), No Doubt, Mumford & Sons and P!nk can goose sales, there's still a chance current albums could make a comeback and eke out a higher total.
Parsing album sales by genre, country was the only major genre posting growth in the first half of 2012, with a 5.8% increase in album scans to 19.5 million units, up from 18.4 million units in the first half of 2011. Rock held steady, posting a 0.4% decline to 52.1 million units from 52.3 million in the face of a 3.2% album decline for the entire U.S. album market. Gospel/Christian also held up well, dropping just 0.3% to 10.62 million units from 10.66 million.
Latin had the biggest drop, with album sales falling 19.5% to 5 million units from 6.2 million. R&B/rap declined 7% to 24.7 million units from 26.5 million. And the year's most buzzed-about sensation, electronic dance music, suffered a 6% unit decline to 4.9 million units from 5.2 million. But EDM's downslide in album sales was more than offset by a 62.7% jump in track sales to 28.2 million units from 17.4 million scanned in the first half of 2011. ••••