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Physical media value dropped 13% in 2006, RIAA says

Data from the Recording Industry Association of America show that the music industry’s decline accelerated in 2006 despite a surge in digital sales. Physical media took a big hit in 2006, falling 13.8 percent in dollar volume to $9.65 billion. Unit volume of music video, mostly Music DVDs, fell 32% over 2005.

The overall retail value of the US record industry was $11.5 billion in 2006, a 6.2 percent decline compared to 2005. There were 615 million CDs shipped to retail and specialty outlets in 2006, a 12.8 percent drop from the previous year.

Retail-level dollar volume, combining physical-media and digital sales, fell 6.2 percent in 2006 to $11.5 billion, marking the industry’s seventh annual dollar decline during the past 10 years. In dollars, the industry is almost 20 percent smaller than it was in 2000.

Digital music formats again demonstrated growth in 2006, with 586 million digital singles downloaded – a 60 percent increase over 2005 – and 28 million albums downloaded, a 103 percent increase. Digital sales accounted for 16.1 percent of music industry volume in 2006, up from 8.8 percent in 2005.

Revenues from various mobile formats grew 84 percent to $775 million and subscription service revenues were $206 million, a 38 percent increase versus the prior year. The growth in digital revenues partially compensated for the decline in physical sales.

The RIAA’s shipment report reflects company shipments of music products at suggested retail values. It does not capture licensing revenues or performance royalties (such as those paid by satellite and Internet radio broadcasters). The data are supplied by PricewaterhouseCoopers, LLP to the RIAA.

Story filed 19.04.07

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