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Winnipeg Free Press - PRINT EDITION

Digital stores now leading source for albums

Services like iTunes leave merchants in the dust, while the CD continues to fade away

By: Edna Gundersen

Posted: 02/13/2013 1:00 AM | Comments: 0

THE CANADIAN PRESS Music retailer HMV has filed for bankruptcy in the U.K. HMV Canada's 113 stores were not affected. (CP)

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Thanks to devices like the iPod and online stores like iTunes, even grandma is downloading albums instead of buying CDs.

Music's digital revolution may not be your father's vinyl shop but it's not only a youth quake anymore.

The takeover has spread so widely that in 2012, for the first time in history, digital stores became the primary outlet for buying albums, eclipsing mass merchants that had been the leading sales sector for the previous five years.

And booming digital sales this month suggest the shift is broadening more dramatically.

"As the days tick by, more people get accustomed to experiencing music digitally," says Keith Caulfield, Billboard's associate director of charts, retail. "At the beginning of January, we used to see a huge surge of physical album sales. Now everyone has iTunes gift cards, and moms and grandparents got their first iPads and iPhones. So grandma is downloading that Susan Boyle album."

In the album format, digital jumped six per cent in 2012, though fans still favour the physical version. Last year, 193 million CDs were sold versus 118 million digital albums, according to Nielsen SoundScan's yearend data report.

The breakdown in total album sales:

-- Digital services such as iTunes and Amazonmp3: 37 per cent.

-- Walmart, Target and other mass merchants: 29 per cent.

-- Best Buy and similar chains: 15 per cent.

-- Nontraditional outlets such as Amazon physical sales, mail order, venue and fan club sales: 10 per cent.

-- Indie stores: seven per cent.

Adele's 21 was the year's top-selling digital album with 1.04 million copies, trailed by Taylor Swift's Red with 863,000 and Mumford & Sons' Babel with 778,000. Digital sales fell far short of CD sales: 21 sold 3.37 million copies, and Red sold 2.24 million.

CDs, costlier than downloads, have been allotted less shelf space at Best Buy, Target and other chains, speeding digital's rise, Caulfield says.

"Digital has been consistently growing, and that's to be expected as we progress away from physical purchases and further into streams and music that nobody actually owns," Caulfield says. "It's a natural transition. Nobody's buying eight-tracks anymore."

And yet the LP comeback is flourishing. While only a sliver of the musical pie, vinyl rose 19 per cent, reaching 4.6 million copies in 2012, breaking the 2011 record of 3.9 million.

"The most old-fashioned way of experiencing music continues to grow every year," Caulfield says. "A lot of people still want something tangible."

-- USA Today

Republished from the Winnipeg Free Press print edition February 13, 2013 B4

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