Music Industry Continues Its Move Toward Digital, Streaming

It ain't your daddy's record player

Nielsen Soundscan says that 2012 overall music purchases were up 3.1 percent and that's the news that most media outlets have focused on.

CDs and physical albums continue to be the dominate format but for how long? Photographed is the listening post area in Som Records in Washington, D.C.

What they missed, however, is that overall sales of albums and track equivalents (albums typically have 10 songs) were down 1.8 percent. That's the figure that's much more reflective of whether the sector generated more money.

The truth is that neither number tells the complete story about the health of the industry. What Nielsen Soundscan's figures don't reflect is the money generated by Webcasters, satellite radio, and subscription services, such as Pandora, SiriusXM, and Spotify.