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06 Dec 2009

Digital Song Sales Changing the Game

Listed under: Blog

Good read on how the digital world is passing by Radio’s old standards. No wonder why radio charts are filled with the wrong music.

PP

Digital song sales concentrated on the hits

From RBR.com

According to a recent article in Billboard Magazine, music sales have been changed by the Internet. Whereas music sales used to be dominated by album sales, individual tracks accounted for 57% of all digital music sold in 2008. More intriguing is the fact that the top 200 tracks accounted for 14.5% of sales in 2004 and rose to 15.8% in 2005, 17.1% in 2006 and 2007 and 17.2% in 2008. Through October 25, 2009, the top 200 tracks’ share stood at 18.7%.
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Not exactly what you were thinking, right? We all think of the Internet as fostering diverse listening and independent artists. So why are sales concentrating more and more on the most popular songs?

It turns out that popular tracks may be benefitting from a “herd effect due to the viral nature of the Internet. The awareness generated by that small number of songs could drown out less popular songs.” In other words, top 40 playlists are still driving music sales. In any week, one of out four songs sold belongs to that top 200.

On the other hand, Album sales are trending in the other direction. “The top 200 digital albums have accounted for a smaller share of total digital album sales since 2004.” “The top 200 digital albums have shown an opposite trend in market share, steadily dropping to 21.9% in 2008 from 28.7% in 2004.”

Listeners that purchase albums online are listening to fewer hit albums and more eclectic album offerings, while those that purchase single tracks are concentrating on the top 200 songs more and more. The numbers show that it’s not exactly the expansive and expanding marketplace many have imagined. While the Internet has become the place to find and listen to music by independent and unknown artists, the diverse offerings have yet to impact digital song sales, which remain concentrated on the hits.

There are probably several reasons for this. iTunes is set up and priced for single song sales, making it easy for consumers to get the song they want without buying the whole album. Another contributing factor may be the performance royalty compliance issues that prohibit stations from playing whole albums at once. Could it also be that the quality of the “album” as a unified work of art is lower now that consumers and the Internet are more focused on single songs?

Once again radio needs to catch up to technology!

Paul Porter
Industry Ears