U.S. music sales which include CDs and digital album downloads fell 4.9% in 2006 according to Nielsen SoundScan. U.S. album sales fell to 588.2 million from 618.9 million in 2005. Digital track sales however rose 65% to 581.9 million units in '06 pushing overall music sales to 1.19 billion units for a healthy increase in total music sales including albums, singles, video and digital tracks of 19.4%.
The numbers can be deceiving and these didn't show enough growth in digital from some analysts. "Not only did year-end 2006 digital sales fall short of our expectations, more concerning is the deceleration in growth during the fourth quarter," according to Richard Greenfield of Pali Research. "We are increasingly concerned that digital track sales will struggle to show 40% growth in 2007."
There was a big surge from December 25-31 where SoundScan said digital track sales hit a record 30.1 million units versus a previous record of 19.9 million in '05. Digital album sales for the week totaled 1.2 million. But while Greenfield estimates that the number of digital songs sold in 4thQ rose 57%; he notes that it was sharply slower growth than the 129% jump in the fourth quarter of 2005.
SoundScan sees the numbers more optimistically. For the first time a song, "Bad Day" by Daniel Powter, topped 2 million in digital sales in one year. 22 digital songs exceeded 1 million sales compared with only two in 2005. "Once again, this year we're seeing incredibly high numbers of consumer music purchase decisions," said Rob Sisco, president of Nielsen SoundScan. "We continue to see tremendous growth in digital track and digital album sales, which are up 65 percent and 101 percent respectively." (For an in depth look at the numbers.)