The good, the bad and the digital

The good, the bad and the digital

By Ken Barnes, USA TODAY

The evolution of the music business to a digital marketplace continued apace in 2006, bringing with it the customary mix of good and bad news from Nielsen SoundScan.

On the positive side:

•Digital track sales grew by 65% over 2005 and nearly caught album sales for the first time: 581.9 million tracks were sold, compared with 588.2 million albums.

•Digital track sales set a record in the last week of the year, a 30.1 million total that eclipses the standard set last year at this time (19.9 million).

•Internet album sales (physical albums purchased at Internet sites) grew by 19% over 2005, while digital album sales (entire albums downloaded) more than doubled. They now account for 5.5% of all album sales, up from 2.6% in 2005. Internet album sales are 5% of the total, as opposed to 4% in 2005.

•Overall music sales (albums, tracks and videos) set a new high of about 1.2 billion, nearly 20% better than 2005's 1 billion.

That's a gain of about 195 million sales units, and since digital track sales increased by about 229 million units, the source of the increase is obvious. Which leads into the less positive side of the results:

•The industry suffered another revenue drop. SoundScan does not track revenues, but it uses a formula that equates 10 digital track sales and one album sale. If album sales were down 36.7 million from 2005 and digital tracks were up 229 million (divided by 10, 22.9 million), the shortfall is clear.

•Even with the track-equivalent albums figured in, overall album sales were down slightly from 2005, 646.4 million compared with 654.1 million.

•Actual album sales are still dropping. 2004's total figure was 666.7 million, and that was down considerably from 2001's 712 million. Album sales are down about 17% from that industry high-water mark. On the moderately bright side, the rate of decline is slowing.

A selection of other notable news from the SoundScan report:

•Country trio Rascal Flatts was the year's biggest selling act, with nearly 5 million albums and 3.8 million tracks sold. Five country artists are in the top 10.

•The Fray's How to Save a Life was the top digital album, selling 198,000 copies.

•Akon's Smack That was the phone favorite; it sold 1.57 million mastertones.

Digital reflects radio

Here are the 20 top-selling digital tracks of 2006 with their corresponding rank on the year-end national airplay and mastertone charts.

MORE YEAR-END SALES STATS: The good, the bad and the digital

Mastertones have been tracked by Nielsen RingScan only since September, so the top tunes are weighted toward more recent songs. But clearly, the songs people download to their computers, digital playback devices and phones correspond strongly with the songs they hear on the radio.

Artist/Title	Sales ( millions)	Airplay rank	Mastertone rank
Daniel Powter, Bad Day	1.94	13	N/A
Gnarls Barkley, Crazy	1.63	29	31
Fray, Over My Head	1.52	30	N/A
Sean Paul, Temperature	1.50	2	N/A
Hinder, Lips of an Angel	1.37	47	2
Shakira, Hips Don't Lie	1.37	4	53
Fray, How to Save a Life	1.37	57	N/A
Natasha Bedingfield, Unwritten	1.36	5	N/A
Justin Timberlake, SexyBack	1.32	11	3
Red Hot Chili Peppers, Dani California	1.28	75	80
All-American Rejects, Move Along	1.28	66	N/A
Snow Patrol, Chasing Cars	1.27	69	49
Panic! At the Disco, I Write Sins Not Tragedies	1.14	44	57
Rihanna, SOS	1.13	28	N/A
James Blunt, You're Beautiful	1.07	15	N/A
Nelly Furtado, Promiscuous	1.06	6	N/A
Beyoncé, Irreplaceable	1.03	40	4
Christina Aguilera, Ain't No Other Man	.98	73	63
Chamillionaire, Ridin'	.95	9	29
Pussycat Dolls, Buttons	.93	27	39

Source: Nielsen SoundScan, Nielsen BDS, Nielsen RingScan

These are the year's top 20 albums:

Artist/Title	Sales ( millions)
Various, High School Musical	3.72
Rascal Flatts, Me and My Gang	3.48
Carrie Underwood, Some Hearts	3.02
Nickelback, All the Right Reasons	2.69
Justin Timberlake, FutureSex/LoveSounds	2.38
James Blunt, Back to Bedlam	2.14
Beyoncé, Irreplaceable	2.01
Various, Hannah Montana	1.99
Dixie Chicks, Taking the Long Way	1.86
Hinder, Extreme Behavior	1.82
Various, Now 23	1.80
Mary J. Blige, Breakthrough	1.80
Red Hot Chili Peppers, Stadium Arcadium	1.73
Various, Now 21	1.66
Pussycat Dolls, PCD	1.64
Fray, How to Save a Life	1.62
Various, Now 22	1.60
Tim McGraw, Greatest Hits, Vol. 2	1.60
T.I., King	1.59
Josh Turner, Your Man	1.55

Source: Nielsen SoundScan, Jan. 2-Dec 31, 2006