CD sales drop, digital music jumps in 1st half '07

NEW YORK (Reuters) - U.S. sales of digital music albums grew by 60 percent in the first six months of 2007 but failed to offset the rapid sales decline of compact discs, according to data from Nielsen SoundScan.

Total sales of albums were down by 15 percent for both digital and CDs, with CDs alone falling 19.3 percent to 205.7 million units. Meanwhile, digital album sales jumped about 60 percent to 23.5 million units.

The recorded music industry is struggling in the early stages of a transition to digital formats, such as MP3, from the dominant CD format. CD sales are declining faster than industry executives and analysts have expected.

Digital music sales are currently dominated by Apple Inc.'s iTunes music site, which by some estimates has more than 70 percent of the market.

The largest music company, Universal Music Group, owned by French media giant Vivendi, had the biggest share -- about 27 percent -- of digital sales, and nearly 31.6 percent of the total market share.

Warner Music Group Corp., the fourth largest music company globally, had the second largest share of U.S. digital album sales with 23 percent.

Warner had 20 percent share of music sales overall, placing it third after Sony BMG Entertainment, at 25.2 percent, and ahead of EMI Group Plc at 10.3 percent.

The biggest selling albums in the first half of the year were Daughtry's self-titled work with 1.7 million units, Norah Jones' "Not Too Late" at 1.4 million units and Akon's "Konvicted" at 1.3 million.

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