Dating back to the 1950’s, songs were widely released as singles and sold on 45s. As technology changed, vinyl was replaced by tape and then, tape by CD. With the changes, the sale of singles fell off. Still, tracking of singles remained a major industry metric, and allowed singles to artificially remain a driver in the industry even though their sales were lower.
Over the past few years, the Internet and the MP3, and subsequent players and download sites have brought back the single. Now the Single track is the leading, and fastest growing, segment in music sales. This in turn has helped realign product sales into a direct correlation with the old industry metrics.
An updated version of the Billboard Hot 100 chart, which was originally created in 1958 as a consolidated chart to measure sales in stores, play by radio DJ’s, and play on jukeboxes, remains a major metric for music industry sales and now incorporates digital downloads into its calculation.
The adapting, evolving music industry has come full circle.
Some of the statistical data:
- Global music sites collectively experience a daily peak of over 500k users per minute according to Akamai’s Net Usage Index for Digital Music. User’s are typically loyal to one or two sites with 42% using one source and 29% using two.
- Jupiter Research is predicting CD sales will shrink at a compounded rate of 5% per year and digital music sales will grow over 20% per year. That puts the market for gigital music at more than $2.5b by 2011, up from approximately $1b in 2006.
- Jupiter also estimated 22% of US music sales will be digital by 2011, up from 6% in 2005. The majority of this increase will be in downloads, with a lesser share going to subscription based services.
- 582 million digital tracks were sold in 2006 – a greater than 65% year over year improvement. For the same period, digital album sales doubled to nearly 33 million albums but overall total album sales dropped 4.9 % to 588.2m albums sold (as reported 1/4/07 by Nielsen Soundscan).
- Steve Job’s announced January 9th, 2007 at Macworld that Apple’s iTunes has sold over 2billion songs since it’s launch
Note: Billboard is owned by Dutch media conglomerate VNU which also owns a range of media ranking properties including: Nielson Media Research (acquired in 1999), Net Ratings, AC Nielson Corporation (2001). In summer 2006, private equity firms bought VNU and began the process of delisting the company to take it private.