Monday, October 11, 2004

Music sales bounce back

Industry reeling from 3-year
decline cheers 5.8% increase

By Alex Veiga
The Associated Press

LOS ANGELES - Album sales in the United States rose 5.8 percent in the first nine months of this year, reflecting an overall turnaround in music sales that began a year ago on the strength of hit releases and a growing market for digital tracks.

About 463 million albums were sold in the United States between January and Oct. 3, compared with roughly 437.4 million in 2003, according to Nielsen SoundScan.

Overall, the number of albums, singles and digital tracks sold in the first nine months of the year totaled 562.7 million. Comparable numbers for 2003 were not immediately available. A comparison of overall music sales figures through Sept. 26 showed a 5.4 percent increase in units sold this year over the same period in 2003.

The sales data continued to reflect encouraging news for the industry, which suffered a sales slump from 2000 to 2003, prompting a wave of restructuring by record companies and thousands of layoffs.

"After three years of decline, whether we're competing with softer numbers or not, it's certainly encouraging to see even modest growth," said Geoff Mayfield, director of charts and senior analyst for Billboard Magazine.

The rebound began in earnest in September 2003. Over the following 52 weeks, sales were down only 10 weeks compared with 2003, Mayfield said.

The online music market accounted for the sale of more than 93.6 million tracks between January and Oct. 3. Some 19.2 million tracks were purchased in the last six months of 2003, according to Nielsen SoundScan.

The popularity of downloads has been helped by a flurry of companies breaking into the market following the success of Apple Computer Inc.'s iTunes Music Store and iPod digital player.

It's still too early to tell how fourth-quarter sales will compare with last year.

Traditionally, record companies release their strongest offerings in the fourth quarter in hopes of capturing a big slice of holiday shopping sales.

U2, Eminem, Destiny's Child and R.E.M. are among the acts due to release new albums over the next three months.

Despite the overall increase in sales, the last three weeks have been down compared with the same period last year, when John Mayer's "Bigger Than My Body" and OutKast's hit double album, "Speakerboxxx/The Love Below," were out.

And while 2004 began strong with releases by Norah Jones and Usher each selling more than 1 million copies in their debuts, no other release has since matched that.

The upswing in sales appears to be happening at the same time as online file-sharing, which the recording industry blames for its sales declines in recent years and has tried to stamp out through an ongoing legal campaign against computer users, continues to thrive.

More than 6.8 million people were signed on to file-sharing networks at any given moment in August, compared with 3.8 million in August 2003, according to BigChampagne LLC, an online media tracking firm.

While still a fraction of overall music sales and online file-sharing, sales of digital tracks are encouraging, and if anything, may hint at additional non-digital sales down the road.

U2's latest single, "Vertigo," which debuted on iTunes last week, is one example. More than 30,000 copies of the track were sold in one week, the most since Nielsen SoundScan began tracking such sales.

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