Our take...
After three years of steady growth, digital music unit sales in the US are slowing down, in line with Screen Digest forecasts. Although there is an overall increases year-on-year, the annual changes in digital album and track unit sales have shrunk considerably. Annual sales of digital tracks rose by 226m and 256m units in 2007 and 2008 respectively, however, unit growth was just 89m units in 2009. In percentage terms, the 2009 annual growth rate of only 8 per cent is a dramatic decrease when compared with the growth rates of recent years. In 2008 the annual growth rate for digital tacks sales was 26.7 per cent, down from 43.5 per cent in 2007. Digital album sales growth slowed down from 15.8m in 2008 to 10.6m in 2009.

Usually bolstered by Christmas gift cards and new hardware ownership, US December was notably slow. In the first four weeks of the month, track sales decreased 3.8 per cent and were 6 per cent lower Christmas week, when compared with the same period in 2008. Digital Albums fared better with a 6 per cent increase in the first four weeks of December and a 7 per cent per cent increase over Christmas week 2008. However, any gains made by digital album sales was quickly swallowed-up by the losses incurred by digital tracks, leaving the growth rate for combined digital music sales at a lacklustre 0.4 per cent for December.

The maturation of the UK digital market is tracking US sales with a couple of years of delay. Both digital albums and singles are still experiencing double-digital growth; the annual digital album growth (56 per cent) outstrips that of the singles (36 per cent). The slowdown expected with a maturing market is nevertheless obvious – in 2008 digital album sales more than doubled compared to 2007, while digital single growth was nearly nine percentage points higher. December sales in the UK were also more buoyant than in the US: digital singles sales growth was 36 per cent in-line with the full year growth, while digital albums sold 73 per cent more in December 2009 than December the previous year.

The difference in maturity between the US and UK superficially masks some other interesting trends, notably that the album has remained proportionately more popular with UK consumers than their cousins across the Atlantic. Tracks sold as part of an album made up 58 per cent of track sales in the UK, compared to 46 per cent in the US. This comes against a background of UK consumers maintaining a much higher per capita CD album purchasing in the last nine years, and while the slower decline of the of the physical album market might be attributed to slower digital adoption, in 2009 digital album sales per head in the US and the UK were nearly identical (0.25 and 0.26 per capita respectively).