U.S. music album sales tumble further in 2008

By Dean Goodman

LOS ANGELES, Dec 31 (Reuters) - U.S. album sales slid for a seventh time in eight years in 2008 as growth in the digital arena, one of the few bright spots in the ailing music industry, slowed, according to data issued on Wednesday.

Total album sales fell 14 percent to 428.4 million units during the 52-week period ended Dec. 28, according to retail data collected by tracking firm Nielsen SoundScan.

This follows a 15 percent drop in 2007, and sets a new low since the firm began monitoring sales in 1991. Sales have plummeted 45 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.

This year, the industry also faced an economic recession.

Digital downloads, through online retailers such as Apple Inc's (AAPL.O) iTunes store, have taken on greater importance to the industry, but the impressive growth of recent years is waning. Digital track sales rose 27 percent to a record 1.07 billion units, but the growth was slower than the 45 percent jump in 2007. Digital album sales rose 32 percent to 65.8 million units, after a 53 percent jump in 2007.

Ringtones are also a major new focus. But purchases of the top 100 mastertone ringers slid 33 percent to 43.8 million units. Only one mastertone broke the 2 million mark -- rapper Lil Wayne's "Lollipop." Last year, three did.

Lil Wayne also took honors for this year's top-selling album, moving 2.9 million copies of "Tha Carter III." Last year's No. 1 album was pop vocalist Josh Groban's "Noel" with 3.7 million copies.

Only three other albums sold more than 2 million copies this year: English rock band Coldplay's "Viva la Vida" and country singer Taylor Swift's "Fearless" each with about 2.1 million, and rocker Kid Rock's 2007 release "Rock'N'Roll Jesus" with 2 million. Last year, eight albums sold more than 2 million copies.

Swift, 19, was the biggest artist of 2008, selling 4 million copies, mostly of "Fearless" and her 2006 self-titled debut. Anglo-Australian rock band AC/DC followed with 3.4 million copies, selling almost as many of their old albums as they did of their first release in more than eight years, "Black Ice," which was No. 5 with 1.9 million copies.

Overall music sales, including albums, singles, music video and digital tracks, rose 10.5 percent to 1.5 billion units, after 14 percent growth in 2007 and a 19 percent jump in 2006. (Editing by Mohammad Zargham)