Digital commerce hits record high in '07

DENVER (Billboard) - As physical CD sales continue their free fall, digital downloads again reached record sales figures for the year.

The upgraded Apple iPod Classic is seen during it unveiling in San Francisco, September 5, 2007. As physical CD sales continue their free fall, digital downloads again reached record sales figures for the year. REUTERS/Robert Galbraith

U.S. digital download sales reached an all-time high for the fourth year in a row, culminating with the biggest post-holiday sales week. For Christmas week (December 24-30), shoppers downloaded almost 43 million tracks from various digital music services, according to data from Nielsen SoundScan. That’s a 42.5 percent jump over the 30.1 million downloaded in the same week the previous year.

For the year, 844.1 million tracks were downloaded digitally, a 45 percent rise over the 581.9 million tally for 2006. Digital albums are up 53.5 percent as well, at 50 million sold, compared with 32.5 million in 2006. Fourth-quarter sales also reached all-time highs, with 231.9 million tracks and 14.2 million albums sold digitally during the period, compared with 163.3 million tracks and 9.8 million albums the year before.

Individual songs are performing better, too. “Low” by Flo Rida sold 467,000 downloads for the week, topping the 294,000 digital units of Fergie’s “Fergalicious” for the same week in 2006. In addition, 27 songs sold more than 100,000 units during the post-Christmas rush, with 10 exceeding 200,000. In 2006, only 15 songs sold more than 100,000 and four sold more than 200,000.

These figures highlight a banner year for individual songs as well. Setting the record for the most downloaded digital track in a year is Soulja Boy with “Crank That (Soulja Boy),” which moved 2.7 million copies. Daniel Powter’s “Bad Day” was the top download of 2006 with 1.9 million, while Weezer’s “Beverly Hills” was the digital king in 2005 with 961,000.

Not one track sold more than 500,000 digital units in 2004, but 114 did in 2007, almost double the 61 tracks that crossed that threshold in 2006. Meanwhile, 36 tracks passed the 1 million sales mark, more than double the 17 in 2006.

All these records set in 2007 bode well for 2008 digital sales. The post-holiday spike witnessed during the past four years generally sets the tone for digital track sales in the year that follows once the volume settles down. The 6.6 million tracks sold after Christmas in 2004 carried over into the new year, with weekly sales totals averaging about 5.2 million tracks per week in January, to 9.5 million the week before Christmas 2005.

Tracks then jumped to 19.9 million after Christmas that year, and settled down to an average of 11.3 million in January 2006. Again, digital sales increased to 14.5 million the week before Christmas 2006, rising to 30.1 million the week after. The first few weeks of 2007 then saw average track sales of 19 million. This year’s week after Christmas (which actually only tracked five days after Christmas) produced a robust 42.9 million tracks sold.

While SoundScan’s data measures sales from such digital retailers as iTunes, Amazon and Rhapsody, it does not track sales from artists’ own Web sites (such as Radiohead’s direct-to-fan release of “In Rainbows”) or from widgets placed on artists’ social networking pages (such as James Blunt’s Lala widget on MySpace, which sells his 2007 album “All the Lost Souls”).