Digital Music Outsells CDs at Atlantic

After years of speculation as to when sales of digital music would overtake that of CDs, Atlantic Records has an answer for us: now. In the last quarter, sales of digital music accounted for 51% of all of Atlantic’s sales (even though CDs still count for two-thirds of all music sales).

Another interesting factoid from the linked Engadget article: music sales continue to decline. Back in 1999, record labels took in $14.6 billion; this year, it’s estimated that they’ll take in $10.1 billion.

Although a collapsing economy surely takes a lot of credit for the tumble, a large part of the decline is also due not to OMG TEH P!RATES!!1!!1!, but instead to single track sales at stores like iTunes and Amazon MP3. This, and not piracy, is one of the main reasons that the record labels fought music downloads in the first place: they’d much rather sell 2 million copies of Britney Spears latest crappy CD at 11.99 each ($23.98 million) than 10 million downloads of her latest single ($9.9 million). Of course, I’m using retail numbers instead of wholesale numbers in this example, but the overall drop in revenue would remain the same.

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