Album Sales Down in 2012 But Digital Sales Continue to Grow

2012 was a rather mediocre year for the struggling music industry. According to Nielsen SoundScan’s year-end tally, album sales dropped 4.4% in 2012. However, there is some good reason to be optimistic in the new year. Last year’s decline in album sales was not too shattering since taking the four years of double-digit declines, the U.S. experienced from 2006-2010 into account. 2011 generated the first positive sales gain, a 1.4% increase, since 2004. In addition, digital track sales are enjoying a continued healthy growth which could signify a long-term turnaround for the business.

Download stores surpassed mass merchants by selling 111.7 million units, versus the 93.1 million sold in discount department stores like Walmart and Target. By percentage, download stores now account for 37.2% of all album sales, up from 31.2% at the end of 2011. Last year, the two categories were much closer with 103.6 million to 103.1 million with the big-box stores on top. Digital track sales experienced 5.1% growth to 1.34 billion units and due to that robust performance, album sales plus TEA (track equivalent albums whereby 10 tracks equal one album) only declined 1.8% for the year. It is safe to assume that this trend correlates to the growth of subscription and ad-sponsored services like Spotify, Muve, YouTube and Pandora.

CD sales continue to fall, dropping 13.5% to 193.4 million while digital album sales jumped 14.1%. It is also worth pointing out that vinyl album sales outpaced digital’s sales growth, increasing by 17.7% to 4.55 million units. But that’s still a meager 1.44% of all U.S. album sales in 2012.