A study last year conducted by members of PRS for Music, a nonprofit royalty collection agency, found that of the 13 million songs for sale online last year, 10 million never got a single buyer and 80 percent of all revenue came from about 52,000 songs. That's less than one percent of the songs.
The article also includes a nice little info-graphic that shows value of units shipped from 1973 to 2008, in billions of current dollars.
Two main explanations for the decline in music sales are put forward in the article
First, that it is now generally possible (via iTunes etc.) to buy single tracks for albums. It's argued that many consumers now take this option instead of buying a whole album. I'm not sure the number of CDs sold vs. digital single sales actually supports this claim, but it would be hard to argue that single album song sales hadn't had an impact on total album sales. I personally have found myself buying single tracks on iTunes when previously I would have bought a CD to get that track.
Secondly, that web streaming of music is now much more popular (particularly among teenagers) than it ever was, impacting on actual music sales and even piracy. The claims seems to be that many teenagers are happy to just listen to their music streamed from the net instead of buying or downloading it.
I think the second point misses something important about web music streaming. It's not so much that having the majority of music available in a streaming form on the net provides an alternative to downloading/buying. It's that it provides music buyers a way to try before they buy. I can't imagine how many songs that would previously have been bought without thought, were not bought after having had them tried first. That said, surely a large number of songs were bought when they otherwise wouldn't have been because it was possible to find and try them first.
The article also neatly ignores the total units and focuses only on money. I've read more than a couple of articles that suggest music is being consumed more than ever (in units totals), it's just that music sells for much less than it ever did (particularly when inflation is taken into account).
Interesting case in point. I've recently been reading old 1980s Bay Area Magazines (a free street press magazine published in San Francisco). The 1988/1989 issues are filled with CDs, and articles lamenting the loss of vinyl as a format. The CDs were typically $25 each. That's almost $42 in today's money.
Also, many of the vinyl records I've bought have their original price stickers on them. Most are around $18 and were released in the early 80s. That makes them again almost $40 after inflation.
You typically new release (popular) album is these days $19 to $22.