While there was plenty of dispiriting news in Nielsen SoundScan’s year-end numbers for 2010, there were a couple of bright spots: For one, rap music made a big comeback last year, driven by the top-selling album of the year, Eminem’s “Recovery,” and the non-traditional store sector became the No. 1 retail channel.
While its bump was not huge — just 3% — rap was the only genre to post an album-sales increase last year, scanning 27.3 million units, up from 26.4 million units in the prior year — and five straight years of declining sales, according to Nielsen SoundScan. 2009 saw a nearly 21% drop from 2008’s 33.4 million sales, continuing a plunge from 2007’s 41.7 million, 2006’s 59.5 million and 2005’s total scans of 75.1 million. Moreover, in each of those years, the rap decline was larger than the overall U.S. album market’s decline.

Along with Eminem’s 3.415 million sales for the year, other big sellers in the genre include Drake’s “Thank Me Later” (1.27 million), Kanye West’s “My Beautiful Dark Twisted Fantasy” (882,000), Nicki Minaj’s “Pink Friday” (852,000) and Lil Wayne’s “Rebirth” (710,000) and “I Am Not a Human Being” (664,000), according to Nielsen SoundScan.

It’s all a far cry from the way that rap began the new millennium: It sold 107 million units in 2000, racking up 13.6% of overall U.S. album sales. By contrast, hip-hop finished 2010 with 8.3% of all U.S. album sales.

Country also had a solid year, although the genre was down 5% to 43.7 million units from 2009’s total of 46.1 million units; all other large genres posted declines equal or worse than the overall album market. For example, Christian/Gospel sales declined 13% to 24.2 million units, down from the 27.8 million units the genre garnered in 2009. Meanwhile, rock, the largest genre tracked by SoundScan (it doesn’t track pop as a genre) saw its sales drop 16% to 103.7 million units, down from 124.2 million in the prior year. Also, R&B suffered a similar decline to nearly 57.9 million units, down 17% from 70 million. However, SoundScan’s R&B totals includes rap sales; excluding those, R&B 30.5 million in 2010 was down a whopping 30% from the 43.3 million scanned in 2009.

In examining the breakout between current and catalog in digital track sales, current track downloads grew by 5.6% to 523 million in 2010, up from 2009’s 495.1 million units, while catalog also suffered a decline in this segment, dropping 2.3% to 648.5 million, down from 663.9 million units in 2009. However, catalog continues to dominate the digital track configuration, as it accounts for nearly 57.3% of sales — which means current releases represent 42.7% of sales. In albums, those numbers are almost exactly reversed, with current accounting for 57.4% of album scans last year.

Moving over to music merchandisers, non-traditional merchants — which include digital download stores, online CD stores, concert venue sales, mail-order and stores like Starbucks — continue to lead the way this year, posting an 8.2% gain to 118.3 million units. This marks the first year that non-traditional is the largest music sales channel, accounting for 36.3% of all U.S. album sales. It displaces mass merchants, like Walmart and Target, which suffered a nearly 20% decline in sales to 107.7 millions units from the 134.5 million units that sector generated in 2009.

But the biggest drop was in the chain sector, which saw sales fall a whopping 30.6% to 73.8 million units, from 106.4 million units in the prior year. This was largely due to store closures at chains like Trans World Entertainment, shrinking shelf space for music at Best Buy and Borders, and a realignment in how SoundScan tracks sales.
The beneficiary of that realignment, the indie sector, posted a 10.6% gain as album scans reached 26.2 million units in 2010, up from 23.7 million units in 2009. Part of that gain was due to shifting chains like Newbury Comics and the Gallery of Sound, and Dimples to the indie store sector.

In terms of market-share, Universal Music Group remains the perennial leader. For the year, it garnered 31.4% market share in albums (including track-equivalent ones), beating out Sony Music Entertainment’s 27.4% slice and Warner Music Group’s 19.8% performance. EMI finished fourth with 9.6%, while the indie sector collectively garnered 11.6%. However, that total doesn’t take into account independent labels that are distributed by major-label-owned indie distributors.

In the digital track album realm, UMG’s lead is less overwhelming, as the company garnered 27.5% marketshare for 2010, which was up from the 26.9% the company tallied in 2009. Last year’s performance topped the  24.2% that Sony put up on the scoreboard, as well as the 22.8% garnered by WMG and 9.9% by EMI. The indie sector collectively posted a 15% share. UMG compensated for its smaller digital album share performance by snaring a whopping one-third of the pie, or 33.3% industry-leading market share in 2010, up from the 33% the company tallied in 2009, when it was also ranked No. 1.