Digital vs. CD Sales: 2005 in Review

In this month's Rolling Stone, there's an article about how digital music sales are growing while CD sales continue to drop from 2000 levels. A few interesting points:

1. We're returning to the era of the single. Bands find themselves selling more of their hit single on iTunes than they sell of their hit album in stores. There's debate about whether this is a good thing; some say it will revitalize the demand for new artists.

2. While Apple says record companies are greedy when they ask for more than $0.99 per tune, the execs do have a point when they say that they ought to be allowed to have variable pricing the way they always have in the record business. Also, the typical $0.14-per-digital track royalty payments to artists is less than what they'd make on CDs.

3. Record companies are having to pay large settlements (Sony, $10 million; Warner, $5 million) in the wake of the payola investigation.

4. Same are also hurting when it comes to invasive piracy protection schemes--Sony BMG had to recall 4.7 million CDs that contained XCP or MediaMax copy protection software, as well as foreswear using such schemes again. Take that, Digital Millennium Copyright Act! The settlement of several class-action lawsuits is a proposed $7.50 cash and one free album download or three free album downloads.

5. "The indie model of earning profits on a broad range of small-scale releases, rather than focusing on blockbusters, may offer a new direction for the majors," the article says. I like that.

6. Latin music sales alone grew in 2005, while all other genres shrank. Of course, it's probably entirely because of reggaeton, but hey, I like it anyway.