Music biz fails to hit higher notes

19.2 mil digital downloads helped boost sales in '03

By PHIL GALLO

50 Cent

Keith

A correction was made to this article on Jan. 7, 2004.

HOLLYWOOD -- Despite a 21% increase in sales of recorded music during the Christmas week, overall album sales last year fell 3.6% from 2002, marking a third consecutive down year for the beleaguered industry. Sales of CD albums, which constitute 96% of the market, were down 13.7 million in 2003 to 635.8 million from 649.5 million.

The overall music business was down eight-tenths of a percent for units sold, 687 million in 2003 vs. 693 million in 2002.

Business was bolstered by 19.2 million digital downloads purchased since July. That figure is almost double the number of physical singles purchased; latter category was down 4%.

Universal Music was again the leader in market share, although the unit dipped in both the total albums and current albums categories. Counting only current releases, Universal Music and Video Distribution commandeered 30.2% of the marketplace, down 1.1% from 2002. Taking second was BMG at 18.4% -- an increase of 1% from last year -- followed by Sony (12.5%), WEA (15.4%) and EMI (9.2%, a nearly 2% increase). Indie units account for 14.3%.

When catalog items are taken into account, UMVD drops to 28.1%. WEA, up half a percent, is at second with 16.4%, followed by BMG, up two-thirds of a percentage point, at 15.46%; Sony at 13.71%; and EMI at 9.7%. Indie units handled 16.7% of the business.

Sony's Columbia Records was the top record label for the sixth straight year, commanding a 7.08% market share.

Year-end seasonal sales did provide something of a rally as music sales started the year deep in a hole from which they had trouble emerging. In early February, sales were already down nearly 14% from 2002, and by the end of summer, the drop was still at 8.5%. Much of that decline has been attributed to the closure of more than 1,000 retail locations, including 300 Kmarts.

Chain record stores were responsible for 51% of the year's sales; mass merchant retailers handled 35%; independent music stores had an 11% take; and non-traditional retailers, such as Internet retailers, moved about 4% of the music sold.

Musicvideo sales increased to more than 19.5 million units, up from the 2002's 11 million. DVDs represented 96% of that figure.

Rapper 50 Cent's "Get Rich or Die Tryin' " (Interscope) was the top seller of the year, moving 6.54 million units. Only one other album sold more than 4 million units, Norah Jones' "Come Away With Me" (Blue Note), which moved 5.14 million after the disc and its tracks were nominated for and won five Grammys in early 2003. Its cume is now 7.8 million.

Coldplay's "A Rush of Blood to the Head" (Capitol), another holdover, sold 2.17 million in 2003.

With so many of the year's top 10 sellers emerging in the fourth quarter, the difference between fifth and 10th place, was quite marginal with all discs selling between 2.1 million and 3.1 million.

For the final week of 2003, Outkast's "Speakerboxxx/The Love Below" (La Face) sold 371,000 copies, rising to No. 1 and raising its cume to more than 3 million to become the fifth bestselling album of the year. Also in the current top 20 were the year's fourth bestseller, Evanescence's "Fallen" (Wind-up), at 3.36 million; Beyonce "Dangerously in Love" (Columbia), 2.53 million (No. 6); Hilary Duff's "Metamorphosis" (Disney), 2.4 million (No. 8); and Toby Keith's "Shock'n Y'All" (DreamWorks), 2.3 million (No. 9).

Keith's disc was the bestselling country album, followed closely by two discs that also topped the 2 million sold mark: Alan Jackson's "Greatest Hits Vol. II" and the Dixie Chicks' "Home."

R. Kelly's "Chocolate Factory" (Jive) was No. 7 for the year, selling 2.44 million copies since its release on Feb. 18.

December and the fourth quarter showed considerable promise for the industry. December albums sales were up 5% over 2002 and fourth-quarter CD album sales rose 5.6%.

The top 34 discs in the country last week all posted sales of more than 100,000 copies during the week, which saw only two debuts. Juvenile's "Juve the Great" (Universal/Cash Money) sold 103,000 units to reach No. 32 and B2K's soundtrack disc "B2K Presents ... You Got Served" (Columbia) hit No. 34 on 102,000 sold.

Other debuts included David Banner's follow-up to "Mississippi: The Album," "MTA 2: Baptized in Dirty Water" (Universal), which sold 54,000 and landed at No. 77, and Bravehearts' "Bravehearted" (Columbia) at No. 82 on 50,000 sold. The soundtrack to "Mona Lisa Smile" made it into the top 200 in its second week -- the film's first -- on sales of 21,000.

Fluctuation in the final top 20 was relatively minimal: Britney Spears' "In the Zone" (Jive) rose to No. 10 from 13 on sales of 205,000; Jay-Z's "Black Album" finally saw a spark of life and rose six spots to No. 12 on sales of 189,000; and Beyonce's "Dangerously in Love" (Columbia) rose four slots, to No. 17, on sales that increased 17,000 to 154,000.

Still, the music industry continues to reshuffle as it struggles to maintain consistent production from stars and battle piracy. No album released in 2002 or 2003 has cracked the Soundscan era's top 10, bookended by Shania Twain's "Come on Over" at 14.9 million and Britney Spears' "Baby One More Time" at 10.47 million. That top 10 is a searing reminder of how rarely mega-sellers come along.

The previous time music sales rose from a previous year was 2000, when sales were up 4%. That was seemingly the final exclamation point for an industry that saw the value of its sold product rise from $7.5 billion in 1990 to $14 billion in 1999. Sales for 2001 were down 5% from 2000, and 2002 CD album sales were down 8.7% from 2001.

The cassette, on the verge of extinction, saw sales drop 39.8%.

Nielsen Broadcast Data Systems reported 3 Doors Down's "When I'm Gone" was the most played song on radio; 50 Cent's "In Da Club" was the most played song released in 2003.