Music Industry Milestone: Revenue from digital surpasses physical recorded music in 2011

Contrary to popular belief, up until 2010, CDs sales have outperformed digital downloads in the United States. This changed, albeit by a slim margin, in 2011. According to Nielsen SoundScan, digital music revenue in the U.S. reached 50.3% in 2011. Some may be ready to bury the physical format, but it still represents nearly half of recorded music revenue. A continuing interesting development during the last four or so years is that vinyl records continue to break each previous years’ sales, outselling the format’s sales since the early ’90s. According to the recent report from Nielsen SoundScan, vinyl realized a “36%” growth in 2011 from the previous year. It regards to the news about digital outselling physical, it’s interesting to note that some of those vinyl sales go uncounted, whether in small indie stores that may not report such product or in a live music environment such as sales at small clubs during shows, it’s realistic to believe that, unofficially, physical music formats are still above the 50% threshold when considering pieces that go under the radar in regards to being counted.

An interesting fact presented in the Nielsen report is that albums sold on CD account for more than double the amount of albums sold digitally. Digital album sales were reported as “103.1 million” units versus “223.5 million” CDs sold during the same time (http://www.businesswire.com/news/home/20120105005547/en/Nielsen-Company-Billboard’s-2011-Music-Industry-Report).

The takeaway here is that unless we’re talking about a “track” focused artist (one specifically focusing on single tracks versus albums), artists looking to realize success in part from the sale of recorded music, including album sales, are likely to continue offering both digital and physical options for music releases to their real fans.

-I. Vasquetelle