U.S. single digital music sales flat this year: Nielsen

LONDON Mon Sep 27, 2010 4:07pm EDT

Apple Inc CEO Steve Jobs discusses his company's ''iTunes'' product at Apple's ''Let's Rock'' media event in San Francisco, California September 9, 2008. REUTERS/Robert Galbraith

Apple Inc CEO Steve Jobs discusses his company's ''iTunes'' product at Apple's ''Let's Rock'' media event in San Francisco, California September 9, 2008.

Credit: Reuters/Robert Galbraith

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LONDON (Reuters) - The rapid rise of single digital music sales has stalled in the United States, the world's biggest and most important market, with sales in the first half of 2010 flat compared with a year before.

According to research group Nielsen, digital sales for single track downloads were flat in the U.S. market after a 13 percent increase from 2008 to 2009 and 28 percent growth from 2007 to 2008.

When combined with the growth in digital album sales, overall digital music sales were up over 5 percent in the U.S.

Major music companies such as Vivendi's Universal Music and EMI have pinned their hopes on boosting legal digital sales to counter online piracy and the collapse in CD sales.

Jean Littolff, managing director of Nielsen Music, told Reuters the flat U.S. single sales could be due to weak consumer confidence, the appeal of new music releases and confusion over the many different ways people can buy music online.

"I think this is a plateau, it doesn't mean that this digital consumption is going to drop significantly," he said. "It's a plateau, but it's not yet saturation."

The digital music market has mostly been led by a-la-carte sales on sites such as Apple's iTunes, with the sale of individual tracks or albums, and Nielsen said subscription streaming services where consumers pay for access to music were still struggling to make an impact in the mass market.

So-called audio-visual streaming sites such as YouTube however continued to be hugely popular, while mobile phone music services were getting more traction.

(Reporting by Kate Holton; Editing by David Holmes, Bernard Orr)

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Comments (7)
SomeoneFromUK wrote:
It is incredible that many years into the decline of their traditional business model, and being increasingly held to ransom by Apple, that the music companies have not addressed the market with a united front:

Why doesn’t every music publisher get together to create a Global Digital Download brand, where Users could download any track in whatever formnat the User wanted?

Instead, the Publishers all dream of No1 and squander shareholder value by using old tactics in a new age.

A unified download platform could even force Apple into making iTunes formats available to for sale on the new platform – via the Courts if necessary.

Just because Apple is dominany today, does’t mean they have to be dominant next year.

If all the music publishers collaborated like this they have the chance of creating a global digital brand to erradicate any consumer confusion; to minimise the cost of sales and then to have their share of sales based on the popularity of the songs they Publish.

Is that too simple?

Sep 27, 2010 10:32am EDT  --  Report as abuse
Predrag wrote:
Apple has so far been successful because they were able to build a model that is best for customers (No copy protection, standard AAC audio format, simple purchase and management), as well as best for labels. Unfortunately, the labels are fighting kicking and screaming, afraid of the level of control they may be giving to Apple. So, they forced a tiered pricing model ($0.69, 0.99 and 1.29 in US). Well, they are now reaping the rewards of this model. By hiking up the price by 30% (from $0.99 to $1.29), they clearly and obviously killed the growth of the download market. It was obvious that $1 was the magic number. Anything more, and nobody buys anymore.

Sep 27, 2010 12:03pm EDT  --  Report as abuse
Predrag wrote:
Simply put, Apple has dragged music labels (kicking and screaming) away from the brink of bankrupcy. Apple successfully converted illegal downloaders into actual music purchasers, and labels fought them every step of the way, even though they couldn’t do it themselves, but kept trying.

Ironically, Apple understood the music market much better than the music labels. And the moment Apple gave in to the labels’ pressure, the result is immediately obvious — the growth stalls.

Are these labels ever going to learn?

Sep 27, 2010 12:07pm EDT  --  Report as abuse
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