Digital Track Sales Fall As Streaming Becomes More Popular

Digital sales of individual songs declined during the first half of 2013, while streaming services continue to add users. However, it is not yet clear if the rise in streaming is correlated with the fall in track sales.

This news comes from Nielsen SoundScan numbers, released in July, that give a state of the industry report. There’s a lot of interesting information as to where the digital music industry stands and where it is headed, and here are some of the highlights.

Digital Track Sales Down 2.3% in 2013

Individual track sales have been slowing for some time, and they dipped into negative territory this year, though this was somewhat expected by music industry analysts. The reason for the dip, however, is not necessarily as clear cut as it may at first seem.

Even though streaming services are showing growth, this may have less to do with the drop in track sales than other factors. For example, many digital music stores have integrated effective features that encourage users to purchase entire albums rather than just the songs.

Additionally, much of the decline is attributed to decreasing sales of catalog tracks, as current songs are still seeing digital sales gains. This might be attributed to the fact that many of these songs have increased in price after first dropping in 2009 when iTunes introduced variable pricing, and perhaps many consumers have become more satisfied with the amount of older songs in their digital music library.

Digital Album Sales Up 6.3%

On the other hand, digital album sales have risen throughout the first part of the year. However, that 6.3 percent growth represents a decrease in the rate of growth from the previous year, and in fact the growth rate has been declining since 2011.

But much like track sales, the decrease in the growth rate is not necessarily anything to worry about for the industry -- at least not yet. The rate is still falling from the drastic rise from zero the industry experienced in the middle of the last decade.

Another thing to look at is that these numbers count digital tracks and digital albums separately. Billboard reports that if the two were combined (either every 10 tracks equals an album or all albums were counted as the number of songs they contained), total unit sales would be up 1.6 percent for the year.

Are Streaming Sites the Future of the Music Industry?

It’s still too early to say. As high as the growth rates are for these sites, they still represent a relatively small piece of the digital music industry. Therefore it is as yet unclear what kind of influence they are having on album and track sales.

However, with Apple and Google announcing earlier this year that they are getting into the streaming music game, it is clear that they believe the platform still has room for growth. And those big names will likely introduce the market to music consumers that have yet to try out any other streaming service.