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"The ways fans can enjoy music—and the ways the industry can recognize a return on its investment—have never been greater."
—-Mitch Bainwol, RIAA Chairman/CEO

INDUSTRY LOOKS TO A DIGITAL
FUTURE AMID CONTINUED DOWNTURN

RIAA Says Revenue is Down from $12.34 Billion to $12.27b; Overall Retail Dollar Value is Off Almost 8%
The RIAA tried to put a positive spin on the 2005 sales figures, as they announced, counting all physical and digital product, sales were down just slightly, from $12.34 billion in 2004 to $12.27 billion last year.

The org’s shipment analysis now includes info from music subscription services, in-store kiosks, music videos sold online and mobile phone master ringtones, in addition to a la carte digital downloads.  

RIAA Chairman/CEO Mitch Bainwol decided the glass was half-full.. of digital milk: “The music community has pivoted hard to the digital age, and fans are the true beneficiaries. We have transformed the way we do business and deliver music to consumers. The ways fans can enjoy music—and the ways the industry can recognize a return on its investment—have never been greater: download and subscription services, mobile phone content, enhanced value CDs, burn-on-demand kiosks, digital radio services.  We are working hard to deliver consumers the music they love in the formats they want.

“At the same time, we recognize the very real challenges that continue to plague our ability to invest in the next generation of music. The Supreme Court's unanimous Grokster decision was extraordinarily meaningful, but the theft of music in its various forms continues to exact a heavy price.  The emergence of new digital radio platforms, while exciting and holding great potential, present new challenges if allowed to morph into download-like services without commensurate compensation.”

  • Overall approximate retail value of the industry was $12.27 billion in 2005, compared to $12.34 billion in 2004, with a wholesale value of $7.0 billion.  

  • Overall album shipments, when including both physical and digital albums (albums plus individual full-length tracks divided by 10), were 794.7 million in 2005, a 3.9% decline from 2004.  
  • The number of overall physical units (CDs, DVD videos, cassettes, etc.) shipped to retail decreased by 7.6%.  Counting all formats and all distribution channels (retail and special markets distribution), overall unit shipments of physical product decreased by 8%. The total of 705.4 million CDs shipped was the lowest in more than 10 years.

  • 749 million total units were shipped in 2005, compared to 814 million in 2004.  The suggested retail value of all physical products shipped to various outlets was $11.2 billion, a 7.9% decline.  The wholesale equivalent was $6.4 billion, a 9% drop.

  • Mobile formats (such as ringtones, ringbacks and other artist-related content) shipped 170.0 million units, which represents $421.6 million in retail value.

  • 1.9 million digital music videos were sold online, for an estimated retail value of $3.7 million.  

  •  Full-length digital album shipments grew 198.5%, from 4.6 million units to 13.6 million. Sales of digital singles grew by 163% (as did the retail value) from 139.4 million units in 2004 to 366.9 million units in 2005.

  • Subscription services also continue to gain traction in the marketplace:  approximately 1.3 million music fans subscribe to a service.  The suggested retail value of those subscriptions, when tallied, is $149.2 million.  

  • According to data from The NPD Group, 4.2% of Internet-connected households used a legal online music service in December 2005, an all-time high.     

  •  The Top 100 albums in 2005 cumulatively sold 128.1 million units at record stores, compared to 153.3 million units in 2004, which the RIAA attributes to widespread piracy of the most popular tracks and recordings... and too many consumers blame on lousy records.  

The 2005 statistics are supplied by PricewaterhouseCoopers, LLP to the RIAA and are broken down by U.S. music shipments from record companies to retail outlets and by all U.S. music shipments from record companies (including retail shipments and direct-to-consumer sales and special markets).

A detailed breakdown of these statistics and more can be found at www.riaa.com or here.

 

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