U.S. music sales dropped another 9.5% last year compared to 2006 despite a 44% increase in digital track sales according to Nielson Soundscan.
500.5 million albums sold in various formats last year down 15% from 2006. Only 10% of album sales were digital. But the drop re-calculates to 9.5% when sales of digital singles are counted as 10-track equivalent albums. 844.2 million digital tracks were sold in 2007 compared to 588.2 million in 2006.
iTunes became the third-largest music retailer in the U.S. in 2007.
COMMENTARY: The bad news for labels comes on two fronts. First, digital sales are not growing at quickly enough to cover physical sales declines. Second, as purchase patterns move from $10+ albums to single $.89 - $.99 tracks, record labels can no longer count on the profits which traditionally flow from a hit song.