Forget digital tunes; analog music on the upswing

Seventy-two years ago last week, the 33-1/3 long-playing vinyl record was invented. And while most music fans have moved on to streaming Bluetooth audio, MP3s and other digital music formats, LP sales are higher today than at any time in recent history.
According to Nielsen Entertainment, vinyl record sales have been booming over the past four years. In 2009, 2.5 million albums were sold in the U.S., up from 1.88 million in 2008.
In other words, digital music dominates, but analog isn't dead yet.
"As surprising as it may sound, LP sales are up again this year, and 2009 had the highest number of LP sales ever since we started tracking them," said David Bakula, senior vice president of analytics at Nielsen Entertainment.
From 2006 to 2007, vinyl record sales rose 14%, from 858,000 to 990,000.
The same can't be said for CDs, sales of which have continued on a downward spiral that began after a peak in 2001. In the first half of this year, CD album sales were down about 18% to 110.3 million units from 134.6 million units during that same time last year, according to Nielsen SoundScan.
During that same period, vinyl albums represented just 1.2% of all physical album sales, but that's up significantly from last year when they represented only two-thirds of a percentage point between January and June, Bakula said.
And, while CDs still make up the lion's share physical album sales, their decline seems likely to continue. Earlier this month, at an event announcing Version 10 of iTunes, Apple CEO Steve Jobs noted that Apple had removed the image of a CD from the app's icon. It replaced the CD image with a music note inside of a circle to indicate, as Jobs put it, the future of music: Apple's new Ping social networking music service.
Like Twitter and Facebook , iTunes' Ping lets people follow online friends as well as musical artists by building top-10 lists.
Overall, record company revenues fell by 7.2% to $17 billion in 2009. At the same time, sales of digital music formats -- such as MP3s -- rose by 9.2% to $4.3 billion, which is 10 times what they were in 2004, according to the International Federation of the Phonographic Industry (IFPI). Physical album sales -- made up of CDs, tapes and vinyl albums -- fell by 12.7% globally.
Digital music sales now account for 25.3% of all trade revenues to record companies. In the U.S., digital sales account for nearly half -- 43% -- of the recorded music market, according to the IFPI.
So why, in the midst of a continuing boom in digital music sales, are vinyl record sales growing? Older audiophiles, who've long maintained that vinyl albums more accurately reproduce an artist's music, make up a large portion of the buyers shelling out money for LPs, Bakula said.
In addition, a younger generation of music fans is also buying vinyl albums because of the medium's historical significance and because they appreciate the album cover artwork and the extensive liner notes available with LPs.