Do Tracks Make Up for Albums?

According to an AP story, music album sales - 229 million - in the first half of the year were down 15 percent over the same period last year, according to Nielsen SoundScan. Over the same months the industry sold 417.3 million digital music tracks, which was up 49 percent.

Yet the numbers are deceiving on the surface. Assuming that albums go for $12 each, that would be roughly $2.75 billion in sales. Since the number of albums is down about 15 percent, that would mean a loss from the previous year of 40 million albums, or about $480 million.

But even at 99 cents each, the digital tracks would total about $417.3 million in sales, and they had roughly doubled. So offsetting the $480 million album loss is just over $200 million in digital sales. Clearly what we're seeing is not a 1-to-1 replacement, and so the industry is making less money overall. So what's the real story? I really don't think it's pirating so much as consumers often find albums padded out and are only interested in a few cuts.

Digital tracks become an efficient way of getting just what you wanted. If music labels want to retail the same profit levels, they'll have to address issues of quality and customer demand. Otherwise, no one will have an incentive to go back to albums. Unless the labels start to understand what it is people want, rather than using a "me too" approach, following all the other labels around in a circle, they'll have to tighten their belts quite a bit.