U.S. music sales slump 18.6%

Rise in digital can't offset drop in physical units

LONDON -- Recorded music sales -- made up of trade value revenue from physical sales, digital sales and performance rights -- decreased 18.6% in value from the previous year to $4.98 billion in the U.S. in 2008, according to new figures from the worldwide recording industry organization IFPI. The global year-to-year decrease was 8.3% to $18.4 billion.

The physical sales decline in the U.S. was 31.2% to $3.14 billion, compared to a global fall of 15.4% to $13.83 billion. In Europe, the decline for physical sales was 11.3% to $5.81 billion, while the overall market decrease was 6.3% ($7.31 billion).

Digital sales -- including a-la-carte and subscription revenue online and from mobile, as well as ad-funded streaming services and ringtones -- increased in all continental markets but not by enough to offset the physical slump. There was a 16.5% digital increase in the U.S compared with the previous year, to $1.78 billion, while European digital sales soared 36.1% to $750.8 million. The global digital increase was 24.1%, to $3.78 billion.

Asia bucked the trend, with total sales up 1% in 2008 ($4.77 billion) and digital up 26.1% ($1.06 billion). But physical sales were down 4.9% ($3.6 billion).

The Latin America market was down 4.7% to $518.6 million, with physical sales declining 10.3% ($430.3 million) and digital up 46.6% ($62.6 million).