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Music retailers cheer first sales increase in 7 years

A 3.2 percent uptick in overall sales may not seem like much, but it's the first glimmer of hope since 2004.

Jim Donio (right), president of a group representing music retailers, cheered the first increase in music sales since 2004.
Greg Sandoval/CNET

Music retailers sound ready to uncork the champagne on the news that overall sales for the music industry rose for the first time in seven years.

Overall sales were up just a modest 3 percent in 2011, Nielsen Soundscan reported yesterday, but from the music industry's point of view, any increase is manna from heaven. It was common during the 7-year slump to see double-digit declines.

Jim Donio, president of the National Association of Recording Merchandisers, the trade group representing music retailers, called the yearly sales figures "significantly positive."

According to Nielsen, digital album sales came in at 103 million, up 19 percent, and digital tracks climbed to 1.3 billion, an 8.5 percent increase from last year. Nielsen's numbers only account for unit sales and not the revenue generated. The Recording Industry Association of America (RIAA) collects that data, but the trade group for the four major record companies hasn't reported yet.

So what's driving this? Well first, there's no doubt that the popularity of "21," the second album from British vocalist Adele, played a big part. She sold nearly 6 million albums. Adele's track "Rolling In the Deep" also sold 5.8 million copies.

There's a laundry list of other possible factors. The RIAA is likely to say that their antipiracy efforts helped. The association won a copyright lawsuit against the company operating file-sharing network Limewire and it was driven out of business in 2010. Last year was the first full year without Limewire in operation--although plenty of services still enable illegal file sharing.

We have more mobile devices than ever that play music, including the new crop of digital tablets. At the same time, it seems that some consumers continue to opt for CDs and vinyl, says NPD.

Retailers also deserve some of the credit. At the same time that Lime Wire was getting clobbered in court, music got easier to sample, discover, and buy. Fans can get a taste of free tracks at YouTube and Pandora and can receive access to deep pools of songs for a monthly fee at such subscription services as Spotify, Rhapsody, and MOG. A big new competitor also jumped into the fray in the form of Google Music.

We can't forget iTunes, the top retailer in the music landscape, which upgraded by enabling users to store their songs in the cloud and retrieve them via the Web.

It's important to keep in mind that last year's uptick might be a blip. There's nothing to say that sales won't go back into the dumper this year. That said, it still feels like music has some momentum for the first time in a while.