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Music Sales Hit Eight Year Low

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    Posted: April 11 2006 at 8:49am

Music Sales Hit Eight Year Low; Digital Sales Up

The music industry once again saw a decline in album sales in 2005, down 7 percent from 2004 to 618.9 million units, according to Nielsen Soundscan data. 2005 marks the lowest since 1996, when music sales were 616.6 million.

Although digital music sales were up considerably, the increase could not compensate for the over decline: overall sales of music are down about 4 percent if 10 tracks counts as an album.

After enjoying an "up" year in sales in 2004, it seemed as though the tides were turning. Illegal downloads, rival forms of entertainment such as video games, and a lack of breakout musical act didn't help the year's music sales, as the decline marked the fourth of the last five years, despite the industry's numerous efforts to contain piracy.

Record executives hoped for a very strong holiday season to make up for the rest of the year, but even with 20 percent of the annual sales being made in the last six weeks of 2005, it didn't make up for the overall sales slump.

There is still a silver lining in all these dark clouds. On the positive side, digital track sales are expected to soon make up for the decline in album sales, with single track sales hit a record 19.9 million units in the last week of the year. The record was the first time that weekly sales of individual tracks exceeded those of albums, according to Nielsen SoundScan.

Digital track sales exceeded 352 million units, up 150 percent from a year earlier, while digital album sales hit 16 million units, which is up 194 percent from 2004.

2005's top album, Mariah Carey's comeback release The Emancipation of Mimi, sold nearly 5 million units, but compared to Usher's 2004 release, Confessions, which sold almost 8 million, Carey's effort wasn't as effective. 50 Cent finished in second with 4.8 million sold, as Kelly Clarkson, Green Day and the Black Eyed Peas followed with 3 million units sold.

Universal Music Group finished on top, as the top music distributor of 2005 with 31.7 percent of album sales, up from 29.6 percent in 2004. The company released both Carey's album and 50 Cent's album -- the #1 and #2 top selling albums.

Sony BMG was second with 25.61 percent, down from 28.4 percent in 2004; and Warner Music Group was third with 15 percent of the market.

Feeling the effects of the decline in sales, the music industry have filed more than 17,000 lawsuits against individual users accused of trading music files illegally, reaching settlements with roughly 3,900 of them, according to the Recording Industry Association of America.

Pressure from major labels has prompted the shutdown of several file-swapping companies including Grokster and WinMX.

"The whole landscape has been basically sullied by litigators," Wayne Rosso, former president of Grokster Wayne Russo, told the New York Times. "Most of the companies' resources are put into litigation instead of their core business, which is finding and marketing new fresh talent. Unless they start thinking differently, then I think the decline is going to keep going."

— Ronnie Gamble

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