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The Honolulu Advertiser
Posted on: Sunday, April 22, 2007

Online purchases slow sale of albums

By Alex Veiga
Associated Press

LOS ANGELES U.S. album sales are down 17 percent so far this year, a downward spiral caused in part by a surge in online music purchases and fewer big-name albums being released in the first quarter.

A total of 135.8 million albums were sold in the U.S. through the end of last week, compared with 163.3 million in the year-ago period, according to Nielsen SoundScan.

The number of digital tracks sold, meanwhile, jumped 53 percent to 250.8 million compared to 164.2 million in the same period last year, the firm said.

The shortfall in album sales drops to 10.5 percent when sales of digital singles are counted as 10-track equivalent albums.

"It's not making up totally for the decline, but at least it's able to account for some of the decline in sales," said Chris Muratore, vice president of retail relations for Nielsen Entertainment.

Still, overall music sales are up by more than 17 percent, but that figure includes all albums, singles, music videos and digital downloads.

The recording industry has seen CD album sales decline for years, in part because of the rise of online file-sharing, but also as consumers have spent more of their leisure dollars on other entertainment purchases, such as DVDs and video games.

The industry has benefited from sources of revenue that weren't around just a few years ago, such as mobile music sales.

So far this year, more than 72 million ringtones have been purchased by mobile phone users, according to Nielsen RingScan, which began tracking the sector last fall.

One factor in the decline of album sales is that record labels have cut back on the number of new album releases by major artists early in the calendar year.

"If you look at the last couple of years, fewer and fewer of those acts have been released in the first half of the year and this year has been horrible," Muratore said. "It's proven that if you put something out, an established name, a big name, people are going to go buy the music."

"Six out of the past seven years, the No. 1 album was released no later than May," Muratore said.