The data should create the narrative, not the other way around. A number of journalists have ignored this rule in recent weeks. If you stay current on music industry news, you may have read some articles that will give you the wrong impression about the size, shape and momentum of the digital music marketplace.
 
The articles arose from Nielsen's release of SoundScan and streaming numbers for the first half of the year. Nielsen's press release showed four things: download sales no longer have high growth rates, track sales are in negative territory, digital album sales growth is still positive and streaming activity is experiencing strong growth.


 
People seem to have overlooked the fact that digital growth rates have been slowing over the years. They often confuse growth rate (in percentage terms) with growth (in units). They often don't understand the small size of the streaming market relative to the download market. And they too quickly blame the growth in streaming services on the current state of digital sales.
 
Here are four wrong and/or misleading statements in recent articles:
 
-- "Digital downloads are plummeting as users turn to streaming," says Business Insider, which used information from Digital Music News
 
Download sales are not "plummeting" in 2013. In fact, download sales are in line with label forecasts and follow trends established in recent years. Digital album sales were up 6.3% in the first half of the year. If digital albums are converted to tracks -- or vice versa -- digital unit sales were up 1.6% in the first half of the year.
 

 
People are indeed turning to streaming services -- but that's nothing new. Pandora added about the same number of monthly active users in 2012, 18 million, as it did from February to December 2011, 16.6 million. (Pandora's January subscriber figures were not made public.) Muve Music added subscribers at about the same rates in 2011 and 2012. Spotify reportedly added 600,000 U.S. subscribers in its first nine months and stood at 1 million eight months later (when it debuted the Metallica catalog in December).
 
In unit terms, digital sales are on track to match, or come close to, the 4.7% growth in total digital sales of 2010. If tracks and albums continue on their current paces, total sales (assuming ten tracks per album) will rise just 4.3% this year. (Total digital sales growth was 12.5%, 13.1% and 9.1% in 2009, 2011 and 2012, respectively.) Sales were weak in 2010. In fact, track sales were actually in negative territory through October of 2010 but closed the year in positive territory after LimeWire was shut down. But because there is little chance of a similar external shock to the download market, don't expect a similar rebound this year.
 
Thing to remember: negative growth in track sales is not a surprise given historical trends.
 
-- "The consensus on why [the digital track decline] is happening appears to be that more people are switching to on-demand streaming services," says Evolver.fm of the year-to-year decline in track sales. There's one problem with that statement: there isn't a consensus among well-informed people.
 
A major label source that studies these trends tells me there is no evidence yet that streaming has cannibalized digital purchases on either a macro or micro level. On a macro level, it's easy to see that digital purchases have grown as consumers have had an increasing number of both free and paid streaming options.
 
The analysis is ongoing, however, and could one day lead to a conclusion that streaming adoption is affecting purchases. Imagine spending on music as a relatively static percent of disposable income from year to year. If more money goes to streaming services, less money will be left for purchases, concert tickets and related items. Something has to give.
 
Thing to remember: Digital sales continued to grow for years as people streamed music. YouTube, the king of streaming sites, launched over eight years ago and was purchased by Google nearly seven years ago.
 
-- "Music streaming expected to decimate iTunes Australia," claims Australian Financial Review. This might be an accurate assessment if the sentence continued with "by the year 2020." 
 
Australia's digital market is dominated by download sales. According to the IFPI, downloads accounted for 87% of Australia's $238 million digital market in 2012. (As a point of comparison, downloads were 80% of U.S. digital revenue last year.) Performance royalties from Internet radio and on-demand streaming services comprised nearly all of the remaining 13%. Subscription services' share of digital revenue was less than 1% (the IFPI rounded it down to zero). 
 
Leaving out a time frame leads to a misleading headline. In a future where streaming is the dominant method of music consumption, music streaming will have decimated iTunes sales. But it's vital to consider the time frame. 
 
Thing to remember: High growth in a very small segment (subscription services) has a very small impact on very large segments (downloads). 
 
-- "The album is headed for a comeback," says USA Today. After noting that digital track sales were down 2.3% in the first half of the year, the article says "sales of digital albums grew 6.3%, challenging the notion that the format is headed toward extinction in an era defined by hit singles."
 
It's a pleasing narrative. But look back a few years and you will see digital albums have regularly had the stronger growth of the two formats. From 2007 to 2012, the spread between digital album growth and track growth averaged 8.9 percentage points, with a high of 10.8 points in 2009 and a low of 4.9 points in 2008. (In other words, digital album growth was 19.1% in 2009 and track growth was 8.4%) Through July 21st, the spread was 7 points.
 
A better statement by USA Today would have been, "The digital album has slowly been gaining strength." Since 2004, the album has steadily increased its share of total track sales. If each digital album counts as ten tracks, digital albums have risen from 28% of track sales in 2004 to 47.1% through July 21st -- without a single decline in any period.
 
But the album isn't really making a comeback. With the decline of CD sales and the rise of on-demand streaming options, songs are increasingly served in single servings.
 
Thing to remember: the digital album is not making a comeback just because it's still showing positive growth.