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U.S. music sales exceeded 1 billion (at 1.2b) for the second consecutive year in 2006, up more than 19% from 2005, when sales were at 1 billion.

MORE THAN A BEEEEELLION SOLD

2006 Music Purchases Up 19%, Digital Track Sales Up 65%, Album Sales Down 5%
The glass is half full.

That’s the results from Nielsen SoundScan’s annual state of the record industry, with U.S. music sales exceeding 1 billion (at 1.2b) for the second consecutive year in 2006, up more than 19% from 2005, when sales were at 1 billion.

Of course, that includes a whopping 65% rise in digital track sales to nearly 582 million compared to 353 million in 2005.

The CD remains in free-fall, with album sales down 5%, from 620 million in 2005 to nearly 590 million this year. Factoring in digital sales (with 10 downloads equaling a single album), Overall Album Sales were down just over 1%.

Over the final two weeks of 2006, music sales exceeded 47 million for the week ending 12/24 and 45 million for the week ending 12/31. If only it were Christmas all year long.  In all, 20% of total album sales occurred during the holiday season (the last six weeks of the year).

Digital track sales over the period between Dec. 24 and Jan. 1 set a new record with more than 30 million sales, while digital album sales exceeded 1.2 million for the same span.

Beyonce’s “Irreplaceable,” Fergie’s “Fergalicious” and Akon’s “Smack That” all set records by selling more than 250k digital downloads that same week.

Doug MorrisUniversal Music Group was once again the leader in Total Albums (31.6%), Current Albums (34.4%) and Catalog (27.1%), though slightly down in all categories from 2005. Sony BMG was #2 across the board in Total (27.4%), Current (28.1%) and Catalog (26.3%), virtually even with last year. Warner Music Group was third in Total (18.1%), Current (16.8%) and Catalog (20.2%), followed by EMI in Total (10.2%), Current (9.2%) and Catalog (11.8%).

Bob Cavallo’s Buena Vista Music Group had the year’s top two albums in Disney RecordsHigh School Musical soundtrack (3.7m) and Lyric Street’s Rascal Flatts (3.5m), followed by Arista Nashville’s Carrie Underwood (3m), Roadrunner/IDJ’s Nickelback (2.7m), Jive/ZLG’s Justin Timberlake (2.4m), Custard/Atlantic’s James Blunt (2.1m), Columbia’s Beyonce (2m), Disney’s Hannah Montana soundtrack (1.9m), Open Road/Monument/Columbia’s Dixie Chicks (1.9m) and Universal Republic’s Hinder (1.8m).

Daniel Powter’s “Bad Day” was the year’s Top 10-Selling Digital Track and Song, while The Fray’s How to Save a Life was the Top-Selling Digital Album. Akon’s “Smack That” was the Top Mastertone.

Other fascinating factoids:

*22 Digital Songs exceeded the 1 million sales mark compared to only two last year.

*41% of all albums purchased were at a Mass Merchant outlet, compared to 40% in 2005 and 38% in 2004.

*Chain music stores accounted for 41% of all album sales, compared to 45% in 2005 and 48% in 2004.

*Independent music stores accounted for 6% of all albums ales compared to 7% in 2005 and 9% in 2004.

*Classical music sales were up 22.5% and soundtrack sales were up 19%, while rap was down 21% and R&B was down 18%.

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