Streaming, Vinyl Rises Amid Declining Album Sales in Nielsen's 2014 Report

Vinyl sales nearly double in 2014, while the compact disc experiences a record low year

Taylor Swift's '1989' was one of the best-selling albums of 2014, in an otherwise dismal year for music sales. Credit: Kevin Kane/Getty

All throughout 2014, there were clues that the year was shaping up to be a historically bad one for the music industry. Statistics company Nielsen Music, which tracks album and song sales and streams, has unveiled its 2014 year-end report and it confirms those concerns. Digital and CD sales experienced staggering drops as nearly a fifth of music buyers stopped shopping for albums at major retailers. However, there were some glimmers of hope amid the declining sales.

The good news first: Streaming was up in a big way in 2014 with 78.6 billion audio streams to go with 85.3 billion video views. That marked a 54.5 percent increase over the total streams in 2013. Because of the giant influx of streams, "Overall Album Consumption – Track Equivalent Albums" (Nielsen's term for counting 10 track purchases as the equivalent to one album) and "Stream Equivalent Albums" (1,500 streams equaling one LP) – remained steady as well, with 476 million "albums" being sold, only a two percent drop from the "Overall Album Consumption" figures from 2013. "Total Digital Music Consumption" also rose 3.7 percent in 2014.

Vinyl continues to be a noteworthy music industry trend, and in 2014, the 12-inch had its best year in decades, selling 9.2 million units. That's a 51.8 percent increase over 2013, and vinyl sales now account for six percent of all physical music sales. However, other than vinyl and streams, 2014 was a rough year for the music industry, especially the compact disc.

Only 257 million albums – be it CD, vinyl or digital – were sold in 2014, an 11 percent drop from 2013's 289 million "Total Albums Sold" tally. The CD experienced the most frightening drop: After selling 165 million units in 2013, another 14 percent eroded off that record low total, with only 140.8 million CDs being sold in 2014. To put it in perspective, only two CDs went platinum in 2014: Taylor Swift's 1989 and the Frozen soundtrack. No other compact disc hit a million copies in 2014; Pentatonix's That's Christmas to Me came the closest with 736,000 copies.

There was more bad news for the record industry. Digital sales were down 9.4 percent as well. Catalog releases experienced a double-digit percentage drop across all formats. Mass market and chain record stores – Target, FYE, etc. – saw their album sales dip 19 percent and 20 percent respectively. On the flip side, music fans stayed loyal to indie shops, as sales only dropped 0.5 percent for independent music stores.

"Music fans continue to consume music through on-demand streaming services at record levels, helping to offset some of the weakness that we see in sales," Nielsen's SVP Industry Insights David Bakula said in a statement. "The continued expansion of digital music consumption is encouraging, as is the continued record setting growth that we are seeing in vinyl LP sales."

The race for "Top Selling Album" was a two-horse field, and no other LP was even close. For the past three months, we wondered whether Taylor Swift's 1989 would topple the Frozen soundtrack, and when the dust cleared – based on U.S. sales only – 1989 edged out Frozen 3.661 million to 3.527 million. Only two other albums went platinum: Sam Smith's In the Lonely Hour with 1.2 million and Pentatonix's That's Christmas to Me with 1.1 million. Remarkably, the Guardians of the Galaxy soundtrack, a compilation of Seventies-era hits represented as a cassette mixtape, finished fifth with 898,000 copies, beating out Beyoncé's Beyoncé.