The most important sales story of 2009 was not the number of units purchased, but the revenue generated from those purchases. In 2009, as in the previous two years, revenue took a big hit. Including CDs, LPs, digital albums and tracks (and excluding ringtones, the negligible number of cassettes that were purchased and the few music DVDs sold), wholesale revenue and consumer spending dropped about 10% in 2009. Those are very rough, ball park figures, but they're close enough to tell the story and express the downward trend. In reality, wholesale and retail prices have changed slightly over the years. Because these numbers are used only in example, static rates are used rather than changing rates.

A recent Nielsen press release recapping 2009 music sales highlighted the slight growth in the number of music purchases. "2009 music purchases up 2.1% over 2008," it reads. And because Nielsen emphasized the growth in the number of music purchases, most media reports also emphasized the growth in the number of music purchases. (Even the term "purchases" is slightly misleading. What Nielsen actually tracks are unit sales. There is no way of knowing how many unique purchase decisions were made in 2009. Some people buy a track at a time, some people buy many tracks and albums at once.)


But unit sales are the less important part of this story. The increase in unit sales is a byproduct of consumers' transition to digital formats. Instead of buying songs in bundles (albums), they are increasingly buying then as individual tracks.

The shift to individual tracks is important in understanding how consumers are acquiring and experiencing music. But at the end of the day, cash is king. Think about 2009's sales in terms of revenue generated and you will have a better picture of the state of the record industry.