Music CDs Slide While Downloads Double

Preliminary numbers show music album sales in the U.S. dropped 7 percent in 2005, but the market for music downloads doubled.

Preliminary figures from Nielsen Soundscan indicate music album sales in the United States slumped by 7 percent during 2005 while the music download market nearly doubled during the same period. Considering 95 percent of music is still sold in CD format, the market for digital downloads is creating a significant new revenue stream for the music industry.

According to early numbers, U.S. sales will total about $602.2 million during 2005, down from $650.8 million during 2004. Online music store sales will total roughly $332.7 million during 2005, an increase of 148 percent over 2004. The year’s biggest-selling albums are from diva Mariah Carey and rapper 50 Cent, both selling more than 4.5 million units.

Doing the math, Nielsen’s numbers would seem to indicate that digital downloads accounts for only 5 percent of music sold, but now account for over one third of the music industry’s gross sales revenue.

CD sales aren’t the only things in decline: sales of music videos and DVDs fell by 23 percent compared to 2004. Nielsen did not provide separate numbers for online sales of music videos.

Nielsen Soundscan will release its final 2005 figures in January.