Music Sales Hit Record $9 Billion

Annual record and music video sales in the United States reached the $9-billion mark for the first time ever in 1992, the Recording Industry Assn. of America announced Thursday.

The figure represented a sales gain for record companies of 15%, the sharpest single-year increase since 1987.

“The data speaks volumes about the staying power of recorded music,” said Jason Berman, president of the Recording Industry Assn. of America, the Washington-based trade group that represents all the major record companies. “The strong consumer response is even more amazing when you consider that the country was knee-deep in the middle of a recession.”

The association’s sales figures are based on record company shipments of 895.5 million compact discs, cassettes, vinyl albums and music videos--up from 801 million units in 1991. The statistics measure products shipped--not actually sold--including items shipped directly to consumers through record clubs and mail-order catalogues.

Several retailers interviewed Thursday questioned the association’s data, suggesting that sales for their chains increased only about 6%-8%. They pointed to the difference between records “shipped” by manufacturers and records actually “sold” in the stores.

“Maybe the manufacturers are doing fine, but we’re one of the biggest chains in the industry and our sales were basically flat last year,” said Jeffrey A. Jones, senior vice president and chief financial officer at the 654-outlet Albany, N.Y.-based Trans World Music Corp.

“As far as I’m concerned that is not an indication of robust performance, it’s an indication of stagnation.”

Arnie Bernstein, president of the 1,000-outlet Minneapolis-based Musicland Group agreed, saying “1992 is slightly better than previous years, but not by very much. Hopefully we’re finally out of the doldrums and starting to move ahead.”

Still, it’s the “shipped” RIAA figures that traditionally have been used in the record business to measure the health of the industry.

The dramatic dollar volume leap in 1992 can be attributed primarily to a 22% surge in compact disc sales, which are priced significantly higher than cassettes. According to the association, consumers spent more than $5 billion for 407.5 million CDs in 1992.

In addition, cassette sales--which have been on the wane in recent years--stabilized in 1992, accounting for about $3 billion in revenue.

Music video sales jumped 24% to $157 million while single and EP recordings in CD, cassette and vinyl formats generated $424 million, according to the association.

Retailers voiced particular concern about last year’s 3.5% leap in record club and mail-order sales--from which they earn no money. The association said record club and mail-order sales contributed to a whopping $900 million in revenues for record companies.

The RIAA’s Berman credited last year’s sales spurt to strong third and fourth quarters and an unusually strong Christmas season. He predicted that business in 1993 would rival or exceed last year’s numbers.

“What helped give us such a powerful second half last year was a string of strong releases,” Berman said. “And it wasn’t just superstar blockbusters driving the business either. Everything sold across the board--rap, rock, R&B;, alternative, country and pop.”