Music sales are on the mend

Despite launching a legal assault against its customer base, the recording industry appears to be benefitting from increasing music sales once again.

While 2003 music sales were flat overall, the record labels enjoyed a healthy spike in the fourth quarter, hinting that the industry doom and gloom so often suggested by the RIAA (Recording Industry Association of America) may be fading. Recent data from Nielsen SoundScan shows that an improving economy is having a positive effect on the music biz.

In 2003, total music shipments slipped but 0.8 percent when compared to 2002. Sales also fell slightly by 3.6 percent year-on-year. In the fourth quarter, however, unit shipments surged 10.5 percent compared to 2002 with sales also rising 4.3 percent.

Along with the strong quarter, the music industry saw success in various areas for the entire year. Music video sales jumped 78.5 percent in 2003, and DVD music video sales rose 104.5 percent year-on-year. Since June of this year, 19.2 million songs have also been purchased in online stores.

So where does this leave us?

The recording industry will likely point to its file trader lawsuit campaign as reason for the uptick in sales at year end. While plausible, this does not seem the most likely of explanations.

The pigopolists have been fighting all year to shut down music trading services and to punish song swappers but with fairly modest success. If file trading was really at the heart of a three year slump in sales, one might expect a far more dramatic change in the data following an entire year of legal scares.

Instead, music sales seems to be following larger economic trends. Imagine that.

U.S. economic reports released in December showed that consumer spending is strong, incomes are rising and job prospects appear far better than at the start of 2003. From July to September, the U.S. economy grew at an annual rate of 8.2 percent, according to the Commerce Department. The government also reported that personal consumption spending rose by 0.4 percent in November, as incomes rose by 0.5 percent.

It should come as no surprise to see music sales improving hand-in-hand with the lot of consumers.

A healthy 2004 will likely leave the music labels with little to complain about, but it's doubtful that an uptick in sales would be enough to call off the swine herd now. Once you've launched a full scale attack against consumers, it's hard to pull back. Even if they pay your bills. ®