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The Honolulu Advertiser
Posted on: Friday, October 13, 2006

As record shipments drop, downloads rise

By Alex Veiga
Associated Press

LOS ANGELES — Shipments of CDs and other physical music formats to U.S. retail outlets were down in the first half of 2006, but the decline was partially offset by downloads, the recording industry's trade group said yesterday.

Record companies shipped 277.6 million units — CDs, music DVDs, vinyl records, cassettes and other physical formats — to retailers, record clubs and other outlets. The figure represents a 15.7 percent decline from the first half of last year, according to the Recording Industry Association of America.

The estimated retail value of the shipments in the first six months of 2006 was $4.1 billion, a 15 percent drop from the same period last year, the RIAA said.

About 435 million albums, including downloads, were sold in the U.S. in the first nine months of 2006, down from about 439 million in the same period in 2005, according to Nielsen SoundScan. The firm tracks retail purchases, while the RIAA figures represent units shipped to retail outlets.

However, demand for music downloaded to computers and cell phones has been growing.

U.S. sales of downloaded singles rose 71.3 percent to 286.3 million in the first half of the year, while the number of albums purchased for download more than doubled to 12.3 million, according to the RIAA figures.

Revenues from downloads, excluding those to cell phones, totaled $417.2 million, an increase of 86.6 percent.