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Album Sales Down, Digital Singles Up in 2006

LOS ANGELES – U.S. album sales, which include CDs and digital albums, fell 4.9 percent in 2006 as an increasing number of consumers preferred to download individual songs from the Web, Nielsen SoundScan said on Thursday. While data from the music tracking company showed overall music unit sales rose 19.4 percent last year due to digital downloads, the growth momentum of that category also disappointed some market watchers. “Not only did year-end 2006 digital sales fall short of our expectations, more concerning is the deceleration in growth during the fourth quarter,” Richard Greenfield, an analyst with Pali Research, wrote in a research note. “We are increasingly concerned that digital track sales will struggle to show 40 percent growth in 2007,” he added. Nielsen SoundScan said U.S. album sales fell to 588.2 million units in 2006, from 618.9 million units in 2005. Digital track sales rose 65 percent to 581.9 million units in 2006, pushing overall music sales to 1.19 billion units, according to the music retail monitoring company. In the final reporting week of 2006, from December 25-31, Nielsen SoundScan said digital track sales hit a new record of 30.1 million units, versus a previous record of 19.9 million in the year-ago period. Digital album sales for that period totaled more than 1.2 million units. Based on the data, Greenfield estimated that the total number of digital songs sold in the fourth quarter, including individual tracks and albums, rose 57 percent from a year ago. That was sharply slower growth than his estimate of a 129- percent rise in the fourth quarter of 2005. The year’s best-selling album was the soundtrack to the Walt Disney Co. TV movie, “High School Musical,” with sales exceeding 3.7 million units, according to the Nielsen SoundScan. Nielsen SoundScan also noted that for the first time, a digital song “Bad Day” by Daniel Powter broke the 2 million sales market in a year. It said 22 digital songs exceeded 1 million sales for the year, compared with only two digital songs 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.”

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