[Dixielandjazz] Album Sales Decline Again

[Steve barbone]

Album Sales Shift Back to a Decline

NY TIMES By JEFF LEEDS - January 5, 2006

The music business cannot seem to shake the blues.

Music executives have attributed the drop in album sales to online piracy,
lackluster creative product and competition from DVD's.

Sales of music albums in the United States fell 7 percent last year, to
618.9 million units, according to Nielsen Soundscan data released yesterday.
Sales of downloaded tracks are increasing rapidly, but not enough to
compensate for the decline: overall sales of music are down about 4 percent
if 10 tracks counts as an album.

The drop reverses the previous year's slight uptick in sales, and means the
industry has posted declines for four of the last five years, despite
laborious efforts to hang on to consumers and contain piracy.

Some executives had held out hope that a strong holiday period, particularly
the last six weeks of the year, which account for 20 percent of annual
sales, would salvage a weak year. But a slate of fourth-quarter hopefuls got
off to sluggish starts.

Sounding a potentially positive note, there are signs that sales of
downloaded tracks may soon make up for the decline in albums. Sales of
individual tracks hit a record 19.9 million units in the last week of the
year, more than double the previous high. It was the first time that weekly
sales of individual tracks exceeded those of albums, according to Nielsen
SoundScan. For the year, sales of downloaded tracks exceeded 352 million
units, up 150 percent from a year earlier.

But the industry remains uncertain about whether, and when, a broader shift
to downloaded music sales will take hold. And as those sales rise, the major
record companies are forced to strike a tricky balancing act that includes
promoting music online while preserving sales of plastic CD's, the
industry's mainstay format for roughly two decades.

There have been exceptions to an otherwise bleak year, including the pop
singer Mariah Carey, whose "The Emancipation of Mimi" began a career
comeback and sold more than 4.9 million copies, ranking as the year's top
seller in a photo finish with the rap star 50 Cent. Other best sellers
included Kelly Clarkson, with her second album since winning the first
"American Idol" contest; and the rock act Green Day, making a career
comeback of its own with a politically charged album, "American Idiot."
Warner Brothers Records, which in addition to the Green Day album cranked
out hits from Madonna, Mike Jones and Michael Buble, captured the title as
the industry's top label for overall sales for the first time in nine years.

The overall slide, however, is a sign that the industry has not yet figured
out how to end a sales decline that began more than five years ago. Music
executives have blamed an array of factors - online piracy, widespread CD
burning, competition from DVD's and video games, and a creative malaise.

Joe Nardone, owner of the 11-store Gallery of Sound music chain in
Pennsylvania, said the music companies continue to charge too much for
albums. Universal Music Group, the biggest of the four major recording
corporations, has cut the wholesale prices of its releases as much as 25
percent in the last two years, but its rivals have so far not followed suit.

Like many other traditional music retailers, Mr. Nardone has added DVD's and
used CD's to offset the damage from the slide in new hits. "The top stuff is
just not selling through like it used to," he said. "Is the business going
to be a niche business? As long as there's still somebody willing to pay for
a CD, we'll be fine."

That, however, remains the biggest question. The industry is continuing its
efforts to deter consumers from downloading free musicfrom unauthorized
online services. It has filed more than 17,000 lawsuits against individual
computer users accused of trading music files illegally, reaching
settlements with roughly 3,900 of them, according to the Recording Industry
Association of America. Pressure from the major labels has also prompted
several high-profile file-swapping networks - including Grokster and WinMX,
to cease operations.

But not everyone is convinced it will be enough.

"The whole landscape has been basically sullied by litigators," said Wayne
Rosso, former president of Grokster, who has been devising a new authorized
online service called Mashboxx. "Most of the companies' resources are put
into litigation instead of their core business, which is finding and
marketing new fresh talent. Unless they start thinking differently, then I
think the decline is going to keep going."