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June 2006 Editorial

RIAA report on Music & Video sales in 2005: where are the new digital formats going to?

Author: Lucio Cadeddu - TNT Italy

As you may already know, RIAA (Recording Industry Association of America) publishes each and every year a so called "Yearend report" about Music sales in the USA. The data concerning 2005 sales have been just released (with the usual 6 months delay). Almost the very same thing has been done by IFPI, the International Federation of the Phonographic Industry, concerning more general worldwide Music sales data.
Considering the 90% of US labels are under the RIAA umbrella and that the US market is definitely the most representative of the current trends I hope you agree these data can be extremely meaningful to us. Yes, we DO know some audiophile label isn't under the RIAA umbrella but that can't make a significative difference, considering the low volume of sales involved.
If you wish to read the whole report, you can download it directly from the RIAA website (the link opens a PDF file).
I'd like to focus your attention on some points that might prove to be matter for thought.

Online versus physical

First of all, with respect to 2004 sales, last year (2005) hasn't been a very positive one. While physical media sales increased by a solid +4.4% in 2004, with respect to 2003, they went down by -7.6% in 2005. This negative attitude has been counterbalanced by a whopping +166% (yes, you read that right) increase of online - read: download - sales. It seems physical media are definitely losing their appeal, in favour of easier online downloads.
I've written "counterbalanced" exactly because, in terms of pure "value" (dollars spent, that is), this increase of legal online downloads makes overall sales figures "flat", with respect to 2004. In other words, the amount of money spent on Music has been exactly the same.
What should we audiophiles think, then? Are we doomed to extinction, considering physical media are going down the drain? Well, let me say I'm quite optimistic instead, in the sense that I believe this will be the future, sooner or later. We can only hope that with the ever-increasing internet connection bandwidth limits and data storage capacity we will be, sooner or later - able to download raw, uncompressed digital Music from the Net. Not 100% good news, I admit, as we prefer the tactile sensation given by a luxurious LP cover, but still better than the horrible MP3 for all! scenario.
Furthermore, there's another datum that makes me feel optimistic for the future: online downloads of albums increased by +198%!!! This means that even online downloaders are interested in full-lenght albums, not only in silly "charts hits", good to burn some fast food Music compilation to enjoy while jogging...

War of Formats

Looking deeply into the cold numbers of the RIAA report I can't help but notice the new "perfect sound forever" format (aka the SACD) seems going nowhere. It scored another quite depressing -40%, exactly like last year. Of course, audiophile labes aren't listed and - perhaps - hybrid SACDs have been listed as pure CDs. But even CDs figures are negative. In any case, the SACD doesn't seem to take off. Quite the contrary, I'd say it has landed and is eventually entering the hangars. Who needs another perfect sound forever anyway? DVD-Audio seems to perform well, with an encouraging +31.8%. Anyway, both high-rez formats sold just 500.000 units in 2005, nothing that can be considered relevant.

Vinyl sales, though decreasing (-25%!) - are still incredibly high: 3.32 millions of units (LP and singles) were sold in 2005. Actually, vinyl sales data should be integrated by the huge second-hand market sales figures. Used vinyl is extremely easy to find and certainly it is sold in extremely large quantities. A look at any HiFi Show proves how lively is the vinyl playback market: new turntables, new carts, new tonearms are being designed each and every year. This means there's still a vast interest in this old medium. And it is not rare to find teenagers who want to discover the vinyl world.

Summarizing, it seems high resolution formats are still going nowhere. As a matter of fact, at least here in Europe, they are not easy to find at regular Music stores. For a format that should replace the old CD this isn't a good sign. Many Music lovers (read: not audiophiles :-)) still don't know what a SACD (or a DVD-Audio) is. We'll wait and see what the blue-ray technique will bring us.
We will go on buying vinyl, that's for sure, as we'll continue reviewing vinyl playback systems. After our High-end turntable saga we decided it was time to publish something similar devoted to budget turntables as we are literally flooded by requests of advices on these kind of TTs, carts and tonearms.

© Copyright 2006 Lucio Cadeddu - www.tnt-audio.com

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