U.S. album sales fall despite Michael Jackson boost

LOS ANGELES Wed Jan 6, 2010 6:52pm EST

Albums of Michael Jackson are displayed at a music shop in Jakarta June 27, 2009. REUTERS/Supri

Albums of Michael Jackson are displayed at a music shop in Jakarta June 27, 2009.

Credit: Reuters/Supri

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LOS ANGELES (Reuters) - U.S. album sales tumbled for the eighth time in nine years as the rate of growth in legal digital downloads slid in a turnaround from recent years, according to industry figures issued on Wednesday.

Total album sales fell 12.7 percent to 373.9 million units during the 52-week period ended January 3, according to retail data collected by tracking firm Nielsen SoundScan. Late pop star Michael Jackson was the top-selling artist, and Taylor Swift had the No. 1 album, followed by Susan Boyle.

The decline in total sales follows a 14 percent drop in 2008, and it sets a new low since Nielsen SoundScan began publishing point-of-sales data in 1991. Sales have plummeted 52 percent from the industry's high-water mark of 785.1 million units in 2000, due largely to Internet piracy and competition from other forms of entertainment such as video games.

While recession-weary consumers spent more money on movies and live concerts in 2009 than they did the year before, they drew the line at music purchases. Liquidations of the Virgin Megastore and Circuit City retail chains did not help matters, nor did the reduction in display space at outlets such as books retailer Borders Group Inc.

On the other hand, the death of Michael Jackson in June provided a boost. The pop singer was the best-selling artist of the year, accounting for 8.3 million units. Neither he nor the next two artists, country star Taylor Swift and the Beatles, actually released new albums last year.

Swift was a distant second with 4.6 million units, mostly for her second album "Fearless," the biggest seller of 2009 and the No. 3 seller of 2008; the Beatles sold 3.3 million units of their newly remastered catalog.

DIGITAL DROPS

Digital downloads through online retailers such as Apple Inc's iTunes store, have taken on greater importance to the industry, but the impressive growth of recent years is waning. Digital track sales rose 8.3 percent to a record 1.16 billion in 2009, but that was far less than a 27 percent increase in 2008 and a 45 percent leap in 2007.

Digital album sales rose 16.1 percent to 76.4 million units, also a record, after jumps of 32 percent in 2008 and 53 percent in 2007.

After Swift, the No. 2 album of 2009 was Scottish singer Susan Boyle's debut release "I Dreamed a Dream," which sold 3.1 million copies after just six chart-topping weeks in stores. Jackson's 2003 hits package "Number Ones" was the No. 3 seller with 2.4 million copies.

Rapper Lil Wayne, who had the top album in 2008, might have featured in the top tier of 2009 with his long-awaited follow-up, but he encountered a problem that exemplifies the industry's woes. His new disc "Rebirth" leaked on the Internet last month, six weeks before its scheduled release date. It is not yet known when or if it will come out officially.

Overall music sales, including albums, singles, music video and digital tracks inched up 2.1 percent to a record 1.5 billion units in 2009. But growth slowed from 10.5 percent in 2008 and 14 percent in 2007.

Among the labels, Vivendi SA's Universal Music Group remained dominant with 30.2 percent of total album sales, down from 31.5 percent in 2008. Sony Corp's Sony Music Entertainment, the home of Jackson and Boyle, followed with 28.6 percent, up from 25.3 percent. Warner Music Group Corp captured 20.6 percent, down from 21.4 percent. Closely held EMI Group Ltd, home of the Beatles, rose to 9.2 percent from 9.0 percent.

Rock remained the top genre, accounting for 124 million albums, a drop of 11 percent. R&B moved up to No. 2 with 70 million (down nine percent), swapping places with third-ranked alternative (68 million, down 16 percent). Country was fourth, suffering only a small drop (46 million, down 3.2 percent).

(Reporting by Dean Goodman; Editing by Bob Tourtellotte)

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