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Nielsen SoundScan is an information system created by Mike Fine and Mike Shalett that tracks sales data for singles, albums, and music video products in Canada and the United States for Billboard and other music industry companies. MTV, VH1, and many other North American cable music channels use Nielsen SoundScan data as well.

Nielsen SoundScan began tracking sales data for Billboard on March 1, 1991 and the first Hot 100 chart to debut with the system was released on November 30, 1991. Previously, Billboard tracked sales by calling stores across the U.S. and asking about sales; a method that was inherently error-prone and open to outright fraud.

The Recording Industry Association of America also tracks sales (or more specifically, shipments less potential returns) on a long-term basis through the RIAA certification system; it has never used either Nielsen SoundScan or the store-calling method.

Sales data from cash registers is collected from 14,000 retail, mass merchant, and non-retail (online stores) outlets in Canada and the U.S. Though this includes all major brick-and-mortar retailers, it is not a 100% sample of record sales; it excludes music clubs as well as some independent retailers and online outlets. In comparison, RIAA's system is a 100% sample of shipments, but does not track actual sales in real-time as Nielsen SoundScan does.

A barcode is on the back of most label-released CDs or cassettes. When the Canadian/U.S. customer is about to buy an album or single, the store clerk runs the barcode across a scanner. The sale is put into the store's computer and the sale data is also sent to Nielsen Media Research offices for the region.

Nielsen SoundScan clients include:

• All major and many independent labels.
• Distribution companies.
• Artist managers and booking agents.
• Concert promoters and venue owners.
• Online retailers and "digital delivery" companies.

American single sales have suffered since Billboard started allowing album tracks on its Hot 100 chart. Nowadays, a single has to sell around 140,000 copies to reach no 1 on the Hot 100; however, sales amounts for singles are rarely given by Billboard. The songs that rank highest on the Hot 100 are those that have high radio airplay impressions.

In 2005, single sales fared better than they had in the years since Billboard started tracking digital downloads from online music stores such as iTunes, Rhapsody, and Musicmatch. Sales of digital downloads increased more than 200% from 2004; however, sales of CD singles were down about 60% from 2004.

• 2005 - American album sales in 2005 fell 7.8% from their 2004 peak. 618.9 million albums were sold, as opposed to 666.7 million in 2004. However, digital track downloads climbed 150% from 2004, and digital album downloads rose almost 200%. Also, the total number of music purchases went up 22.7%, breaking one billion for the first time. As this number includes individual track purchases, a more accurate estimate of total album purchases can be found using track equivalent albums (TEA), which means that 10 track downloads are counted as a single album. Using this, total album sales for 2005 are 654.1 million units, a 3.9% drop from 2004.[1]

• 2006 - While overall album sales dipped 5% to 588.1 million units in 2006, the combined total with digital tracks reached nearly 1.2 billion units, a 20.8% increase from last year's 1 billion units of various music configurations. However, using TEA tallying, only 646.4 million units were sold, which in fact indicates a decrease in sales of 1.2%.[2]

(American Album Sales Only)[3]

• "Album sales slump as downloads rise" by Ken Barnes, "USA Today", January 4, 2006, retrieved April 16, 2006
• Joel Whitburn Presents the Billboard Hot 100 Charts: The Nineties (ISBN 0-89820-137-3)
• "Shania Twain Come On Over Still SoundScan's Biggest Selling Album" by Paul Cashmere, January 5, 2007, retrieved October 25, 2007