Recording Industry Releases 1998 Music Purchase Tallies

Last week, the Recording Industry Association of America released its annual demographic survey of 3051 music purchasers in the United States. "Several interesting profiles emerged in 1998, including the boom in R&B and Gospel, as well as the sharp decline in Rock sales," said Hilary Rosen, RIAA president and CEO. "Demographic shifts also continued, with women outbuying men for the second year, and a drop in purchases among 15-to-29-year-olds, contrasted by significant growth among those age 35 and older." Last month, the RIAA released its annual year-end shipments statistics, which revealed the size of the domestic sound-recording industry in 1998 to be $13.7 billion.

Rock and Country maintained their decade-long domination of the market, although Rock continued to decline, dropping from 32.5% in 1997 to 25.7% last year. According to the report, the absence of hits from established Rock artists, the continued decline of the Alternative Rock sub-genre (down from 11% to 9%, not broken out on the chart), and the shrinkage of buyers in the 20-24 age bracket, once a stronghold for Rock, may all be factors contributing to Rock's decline. With 14.1% of the market, Country remained stable, maintaining its second-place market position.

The hot genres of 1998 were R&B, Gospel, and Soundtracks. R&B growth (from 11.2% in 1997 to 12.8% last year) came mainly in the 35+ age group, and can be attributed to the success of artists such as the triple-Platinum award winner Lauryn Hill, Brian McKnight, Lavert, Sweat & Gill, Erykah Badu, Jon B., and Janet Jackson. Gospel surged from 4.5% in 1997 to 6.3% last year, showing the greatest market growth of any genre.

Movie soundtracks---including City of Angels, The Wedding Singer, Armageddon, Hope Floats, and the Titanic of them all---propelled this genre's growth from 1.2% to 1.7% last year. And Classical enjoyed a healthy year (2.8% to 3.3%), also driven by purchases of Titanic, which, with sales of more than 10 million, is the best-selling orchestral soundtrack in history.

Continuing the trend from last year, women accounted for a higher percentage of units purchased than did men (51.3% vs. 48.7%). Women over 30 accounted for the largest share of purchases, and their genres of choice are Pop and Country (65% and 60%, respectively). The report says that this increase in buying among older women can be attributed to the Titanic phenomenon, along with the success of artists such as Celine Dion, Shania Twain, Jewel, Sarah McLachlan, Sheryl Crow, and Mariah Carey. Conversely, men under 30 outpaced their older counterparts, and Rock dominated their purchases, followed by a combination of R&B and Rap (62% and 51%, respectively).

The report shows that the trend toward an older purchasing demographic continued. In fact, consumers over 30 were the only age demographic to show any growth last year. Consumers of age 35 and older accounted for 39% of the units purchased in 1998, compared to 34% 10 years ago. In 1998, 12% of all purchases were made by those 50 years of age and older, compared to just 6% 10 years ago. Country and Pop dominate the music choices made by these consumers, accounting for 51% and 53%, respectively, of all purchases within these genres.

The report also speculates that the continuing drop-off in the proportion of purchases made by 15-to-24-year-olds (32.2% in 1996 vs. 28% in 1998), once the mainstay of the market, is potentially a result of the rise of the Internet as a free entertainment center, and the accompanying availability of free MP3 music files.

Accounting for 74.8% of the total market, full-length CDs were bought at a greater rate in 1998 than in the past four years. Full-length cassettes, while maintaining their second-place position, continued their gradual decade-long decline (18.2% to 14.8%). Singles declined more than 2% last year, music videos recovered their 1996 market share of 1%, and vinyl held steady at 0.7%.

Last year, more music consumers (86%) shopped at retail outlets than in any of the the previous eight years. However, the gap continues to narrow between purchases made at traditional record stores vs. other retail outlets, such as consumer electronics and specialty stores (51% vs. 34%). The percentage of consumers who purchased from tape and record clubs (9%) dropped to the lowest level since 1990. And for the second year, the RIAA broke out online sales, indicating that 1.1% of music buyers made purchases via the Internet. While instances of online purchasing are still relatively low, this number was almost four times last year's figure (0.3% vs. 1.1%), and now equals the number of acquisitions made from television offers.