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So What Exactly Is A Shipment?

July 23, 2009

Like many other trade associations, the RIAA strives to provide accurate and comprehensive data about the state of the industry it represents.  Historically we’ve posted this info on our website or issued news releases, giving a static snapshot of the most recent data.  But just as the marketplace has become increasingly dynamic, we’re making our reporting more dynamic, too.  Starting today, we’re introducing a new tool that will let subscribers see industry trends in a more comprehensive, flexible, and usable manner.  Our new shipments database allows users to see the data in a more useful way, with charting tools and data output across the major music formats.  Plus, expanded access to volume and value data all the way back to 1973 is now available.  We think this tool will be very useful for industry analysts, journalists, and anyone else with an interest in the macro trends of the music industry. 

It’s probably worth taking a moment now to explain what we mean by ‘shipments’.  We collect data directly from the record companies, rather than from the stores that sell recorded music to the final consumer.  Hence, the term “shipments” as in “shipments from the record labels to the stores they supply.”  Since stores can return unsold merchandise, we subtract returns so the final data you see is a net figure (keep in mind sales and shipments are virtually the same thing for digital products).  Overall, “shipments” and “sales” are very similar, but we use the term shipments for accuracy.  A frequent question we get is whether our data represents the whole US market, or just the RIAA member companies?  Our aim is to describe the whole market, and we use independent estimates to account for the parts that are not created or distributed by the major record labels.  
 
Historically, these reports have focused on sales of physical goods like records, tapes, and CDs.  As we moved into the digital era, the reports expanded to include digital downloads, mobile sales, and subscription services.  Now we’re seeing an explosion in new platforms for music listening like Internet and satellite radio, and social networks, where fans can listen to streams of music instead of buying them directly.  Traditional metrics of album sales and downloads no longer tell the whole story.

Last year we started reporting a new category – digital performance royalties – to better capture the activity on these new music platforms.  It is a small but quickly growing part of the music landscape, one that we think will grow significantly in importance and scale for both fans and the industry.  Most of the value in this category so far comes from satellite and Internet radio.  It’s one slice of an ever-diversifying pie, and we’re constantly working to include as much reliable data as possible in our reports from the many emerging platforms.

Joshua P. Friedlander     
Vice President, Research and Strategic Analysis, Recording Industry Association of America