The latest data from Nielsen – Nielsen SoundScan measures music sales, while Nielsen BDS tracks music streams – shows sales of digital albums are down 11.6%, and sales of individual tracks are down 13%, while on-demand streaming of music has surged 50.1%.
While sales of albums through services like iTunes have declined, users have embraced streaming services. Total on-demand media is up 42 percent, with audio accounting for the most — 50.1 percent. Video on-demand was up 35.2 percent in the first six months of the year.
There is one segment of the physical music media market that’s showing life however, as the data shows sales of vinyl increased 40.4% to 4 million units. (Kids, ask your parents about vinyl… – Ed.)
This latest data is a great indicator as to why Apple just spent $500 million to grab the Beats Music service. (In addition to the $2.5 billion it spent for Beats Electronics.)
Apple intends to continue to run the music streaming service alongside its current iTunes offerings, which include digital music downloads from the iTunes Store, and its own home-grown iTunes Radio streaming music service.