Grosses Flat For Music Retail

A National Assn. of Recording Merchandisers (NARM) survey of its members indicates that increased sales of DVDs and products other than new CDs and videos—a category that includes everything from gift certificates through tickets to blank CDs—helped offset flat U.S. music revenue in 2000.

"NARM retailers are relying on other ways to connect with their customers, many of which don't involve music," NARM President Pamela Horovitz says.

Gross dollar volume for all music products reached $10.46 billion last year—slightly less than the $10.49 billion reported in 1999—according to figures reported in NARM's 2000 Annual Survey Results, a poll of almost 80% of all music chain stores, indie retailers, rackjobbers, and Internet merchants.

The biggest percentage gainer last year was DVD sales, growing by 300% to $1.87 billion—up from $623 million in 1999. For the first time, DVD sales outpaced those of VHS, which totaled $1.12 billion in 2000—down from $1.42 billion the year before.

Also on the rise in 2000 were sales of blank CDs—known as CD-Rs—which totaled $14.6 million and registered for the first time in the survey. CD-R sales accounted for barely 0.1% of revenue generated from the related products segment, while blank audio- and videocassettes totaled $290.5 million, up from $157 million the year before. But NARM says that it will closely monitor sales of blank CDs, because they reflect the influence of digital downloads. NARM reports that sales of legitimate digital downloads were almost too small to measure.

Meanwhile, CD album sales grew 3.7% in 2000, increasing to $9.4 billion from $9.1 billion in 1999. Catalog product increased as a percentage of sales for the first time since 1996, up to 34.4% of the audio market from 33.6% the year before.

Cassette album sales fell 30% to $597.3 million. Also down were singles sales, falling more than 20% to $155 million from $195 million the year before. CD singles fell to $145.4 million last year from $162 million in 1999, while cassette singles fell to $9.6 million from $33 million in 1999.

Average music returns increased for the first time since 1995, from 14.1% in 1999 to 16.4% in 2000.

The Recording Industry Assn. of America earlier this year reported total volume for 2000 of $14.3 billion, but that number reflects manufacturers' shipments at list price and includes nonretail sales.