Digital music consumption is rapidly shifting from downloads to the streaming model popularized by the likes of Spotify and Pandora. According to Nielsen's U.S. music report on the first half of 2014, digital album sales are down 11.6%, while purchases of individual tracks are down 13% from last year. On-demand streaming audio, on the other hand, is up a healthy 50.1% for the period.
Putting that in hard numbers, Nielsen says 120.9 million albums have been sold so far this year, down from 142 million in the first half of 2013. Of those albums, 62.9 million were on CD and 53.8 million were digital downloads.
On-demand streaming is measured in number of plays, which reached 33.6 billion during the period. Based on revenue collected from sales and streams, one album sale is equivalent to about 1,500 song streams, which in turn Nielsen translates to a 3.3% decline overall in music sales for 1H 2014.
The report helps make sense of Apple's acquisition of Beats, as its iTunes download sales model is dying out and iTunes Radio failed to pick up much steam. The company paid $3 billion for the headphone maker, of which around $500 million went towards snapping up the Beats Music streaming service.
Curiously, one segment of the physical media market that's growing is vinyl records, which increased 40.4 percent the first six months of 2013. That, of course, is still just a drop in the bucked as it amounted to 4 million units.