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Digital music sales dip 12 percent as listeners switch to streaming

Nielsen’s latest report on U.S. digital music consumption shows users abandoning traditional download platforms in favor of unlimited streaming services. The statistics show a dip of roughly 12 percent across both album and individual track sales in digital, while on-demand streaming has risen 42 percent when compared with the first half of last year.

The study covers the first six months of 2014 and excludes international and developing markets — the lack of stable, fast Internet connections in many parts of the world may swing the balance back in the download’s favor. Nielsen’s findings seem to justify Apple’s decision to acquire the Beats music platform and develop a Spotify rival of its own as consumers turn away from the established iTunes-style method of buying music.

Also enjoying strong growth alongside music streaming rates are sales of physical vinyl records, up 40.4 percent on the first six months of 2013 to reach 4 million so far this year. When physical and digital sales are combined, total album sales slumped 14.9 percent across the same period, with significant drops in both CD and digital sales that the uptake in vinyl LP purchases couldn’t make up for.

So far in 2014, the most streamed song of the year is Dark Horse from Katy Perry and Juicy J, with over 65 million streams. It has only reached second spot in the list of top-selling digital downloads though, with top place taken by Pharrell Williams’ Happy. The report also covers video streaming, which is still slightly ahead of audio streaming in terms of raw numbers (36.64 billion streams versus 33.65 billion streams so far this year).

With a shift in user behavior comes a fresh opportunity for the entertainment and tech companies to gain power and influence. Google already has its own music streaming service in the form of Play Music All Access and it appears Apple is planning a slow and smooth transition from its old iTunes model to a new Beats-powered approach. Spotify, Rdio, Deezer and now Amazon Prime are also vying for user dollars in this brave new world of on-demand music… and to think we’re only 15 years on from when Napster first appeared.

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