Album sales hit all-time high - but profits slide

The record industry was enjoying some rare but welcome good news today as figures showed album sales had reached an all-time high.

Despite the relentless advance of CD burners and MP3 downloaders, between June 2002 and June 2003, 228.3 million albums were sold in the UK. This is a rise of nearly 3 per cent on the previous year. It is the biggest annual figure in terms of "units" moved yet recorded, the British Phonographic Industry (BPI) announced, and means that album sales have been over the 200 million mark since 1999.

Cheaper CDs and a declining singles market have fuelled the record sales figures. But more discs coming off the shelves has not meant more money going into the record companies' coffers. Overall, the value of all record sales is down 4.1 per cent annually. Cheaper CDs have meant profits for album sales fell by 2 per cent over the period from June to June.

An eclectic mix of albums seems to be driving sales. So far this year, Justin Timberlake's Justified is the top-selling album, followed by the smooth country-jazz sounds of Norah Jones, with her Come Away With Me. Let Go, by the Canadian teenage singer-songwriter Avril Lavigne, is the third-biggest-selling CD so far in 2003. Other big sellers included Robbie Williams' Escapology; Elephant by the White Stripes; the Now! 54 compilation, and Christina Aguilera with Stripped.

The BPI said: "It is clear that cheap retail prices combined with strong new-release titles are sustaining the UK album market at a high level."

Earlier this year, it was revealed that the average price for an album is now £9.79, the cheapest it has been in the UK.

These are seen as major factors for the album sale record being broken, combined with the fact that the singles industry is becoming more and more irrelevant. There has been a 25.6 per cent drop in singles sales in both volume and value terms from the previous year. Forty-one million singles were sold from June to June, compared to 55.1 million the previous year.

Singles are now worth just £75.1m, or 6.5 per cent of the £1.153bn total value of the music industry. CD singles or albums make up 97.7 per cent of total sales but there were still 2.1 million LPs and 1.4 million cassettes sold last year.

A spokesman for Virgin Megastores, Simon Dornan, said that over the past two years a "ramping up" by supermarkets of their sales of CDs had forced prices down. Even though album sales were higher, the cheap prices had meant that the big chains such as Virgin and HMV (which boast 170-180 stores each around the country) were not benefiting.

Mr Dornan pointed to the shutting down of the Tower Records chain in Britain in the past year and Sanity Records' attempt to sell up as signs that finances in the industry were still tight because of low prices.

"Album sales are quite buoyant; singles sales are quite depressed," Mr Dornan said. "[But] it's got to be a good thing for the industry if people are buying albums, [although] it's the retailers who are suffering."

Mr Dornan said people were just not interested in buying singles for £4 when they could buy an album for £10. "Singles have been in decline for some time - the finger can be pointed at the record companies for that," he said. "It's not good news for kids who are getting into their music at an early age - the price of singles has trebled in the past few years."

Just last August, the BPI warned that sales in spring and early summer had fallen 15 per cent on the previous year. The slump was even attributed to the World Cup.

But yesterday the BPI said the latest figures were good news. A spokeswoman, Sarah Roberts, said: "If you look elsewhere around the world, record sales have been falling." She said the quality of the music had to be a reason for the record album sales. "If it was rubbish, people wouldn't buy it."

TOP 10 ALBUMS JAN-AUG 2003

1 JUSTIN TIMBERLAKE - Justified (Jive)

2 NORAH JONES - Come Away With Me (Parlophone)

3 AVRIL LAVIGNE --Let Go (Arista)

4 CHRISTINA AGUILERA - Stripped (RCA)

5 COLDPLAY - A Rush of Blood to The Head (Parlophone)

6 BUSTED - Busted (Universal)

7 RED HOT CHILI PEPPERS - By The Way (Warner Bros)

8 DANIEL BEDINGFIELD - Gotta Get Thru This (Polydor)

9 50 CENT - Get Rich Or Die Tryin' (Interscope/Polydor)

10 THE WHITE STRIPES - Elephant (XL Recordings)