The decline goes hand-in-hand with the rise of streaming, which is up 42% year-over-year; on-demand streams topped 70 billion in the U.S. alone. That serves as more than a silver lining for those involved in the business.
“Streaming continues to be an increasingly significant portion of the music industry,” said David Bakula, SVP Nielsen Entertainment, in a statement. “Streaming’s 42% year-over-year growth … shows interest in buying and consuming music continues to be robust.”
The rise of streaming–at the expense of the digital download–has been in progress for years, but the pace is picking up in 2014. In January, Nielsen’s 2013 Year-End Report revealed digital track sales had fallen 6% from the previous year, the first drop recorded since the iTunes store opened more than a decade ago.
Since then, the pace of deals in the streaming space has quickened as well. A week ago Google scooped up Songza for a reported $39 million, a figure dwarfed by Apple's AAPL +1.99% $3 billion acquisition of the Beats headphone line and its accompanying streaming service, Beats Music.
“We’re in land grab mode now, big time,” said Peter Csathy, chief of Manatt Digital Media Ventures, to FORBES earlier this year. “Cash is king.”
Nielsen’s report offered a bevy of specific data on the most successful music in the first six months of 2014. The top three most-streamed songs: “Dark Horse” by Katy Perry ft. Juicy J (188 million streams); “All of Me” by John Legend (145 million) and “Talk Dirty” by Jason Derulo ft. 2 Chainz (142 million).
Pharrell Williams’ “Happy” garnered the most digital downloads (5.6 million). Otherwise, the digital sales rankings mirror the leaders in streaming, with the aforementioned songs by Perry (4 million), Legend (3.9 million) and Derulo (3.7 million) claiming spots No. 2 through No. 4.
When it comes to physical music sales, CDs continued their freefall, with just 62.9 million albums sold in the first six months of 2014, down 19.6% from the same period last year. One bright spot: vinyl, up 40.4% to 4 million, the latest part of an unlikely recovery that’s been years in the making.
“Digital is zeroes and ones, man, anyway you look at it,” said Chuck Leavell, keyboardist for the Rolling Stones, in an interview with FORBES in 2011. “Whether it’s a CD or a download, there’s a certain jaggedness to it. Vinyl wins every time.”
The format will have to settle in behind streaming, but given the latest from Nielsen, it seems that’s not the worst place to be.
source: forbes.com by Zack O'Malley Greenburg