Paid Downloads Reach All-Time High In Week After Christmas

Nearly 20 million tracks were sold; three times as many as the same week last year.

Music industry execs had better prep that thank-you note to Santa Claus, because the big guy was more than gracious to them this holiday season. Digital-download sales reached an all-time one-week high of nearly 20 million tracks during the seven days following Christmas.

The number was more than double the record of 9.5 million downloads set the week earlier, according to Nielsen SoundScan numbers released Monday, and it was triple the number of tracks sold in the same week a year ago. In its year-end report, Nielsen said more than 352 million digital tracks were sold in 2005, a 150 percent spike from 2004.

Overall music sales in 2005 — including albums, singles, music videos and digital tracks — also reached a milestone, topping the 1 billion mark for the first time, according to SoundScan, and were up more than 22 percent from last year. While physical album sales were down 7 percent, the digital download craze shows no signs of slowing as digital album sales climbed to 16.2 million, up from 5.5 million last year.

"Music is a popular holiday gift, and the number of consumers who enjoy the variety and flexibility of downloaded or streamed digital music is growing rapidly," Jonathan Potter, executive director of the Digital Media Association, said in a statement last month.

"The legal online music marketplace [hit] its stride this holiday season," added Mitch Bainwol, CEO of the Recording Industry Association of America.

One of the reasons legal downloading has gained ground in recent weeks could also be due to the overwhelming demand of stocking stuffers like iTunes gift cards and MP3 players that were at the top of many folks' wish lists.

On Tuesday, Apple CEO Steve Jobs reported that sales for his company reached a record $5.7 billion during the holidays, exceeding even its own expectations for the quarter by selling 14 million iPods. That's nearly three times more than the number Apple sold in the same period a year ago, and it pushed overall iPod sales to 42 million. "That's 100 sold every minute, 24-7," he pointed out at Tuesday's Macworld Expo.

The swell in digital downloads is also occurring abroad. Loudeye, a digital media company that provides content to online music stores, reported last week that paid downloads in Europe had soared more than 200 percent over the holidays, with 85,000 tracks downloaded on Christmas alone.

Still, despite the surge in legal downloads, music piracy remains a cause of concern for the recording industry. The Washington Post reports that peer-to-peer file-swapping services easily boast more than 250 million illegal downloads each week.

"There's still lots of work to do," RIAA spokesperson Jonathan Lamy said. "Far too many people still get their music illegally, but the growth of the legal marketplace shows we are on the right track."

In December, the RIAA filed another round of copyright-infringement lawsuits against 751 file-sharers, including college students at Drexel University, Harvard and the University of Southern California. In an effort to curb illegal downloading, many schools, including USC, offer students access to legal downloading networks such as Ruckus (see "More Colleges Inking Deals With Legit File-Sharing Services").

For complete digital music coverage, check out the Digital Music Reports.