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CD and mobile music sales fall in 2010, but vinyl continues its resurgence

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Vinyl is back.

While sales of compact discs and ringtones suffered double-digit declines last year, vinyl records enjoyed what appears to be an enduring resurgence in 2010, according to figures released Thursday by the Recording Industry Assn. of America.

CD sales dropped 21% in 2010 to $3.36 billion, down from $4.27 billion in 2009, said RIAA, whose members include the industry’s largest record labels. Vinyl LP sales, meanwhile, surged 26%, albeit to a modest $4 million, up from $3.2 million in 2009. The increase comes partly from live DJs who prefer vinyl over digital and partly from a new generation of collectors who see them as valuable souvenirs.

On the digital front, mobile music sales, which is made up of mostly ringtones, dropped 28% to $527 million last year. Sales of individual song downloads grew just 2.1% in 2010 with more than 1.16 billion tracks sold, compared with 1.14 billion in 2009. But overall digital music revenue grew 10%, in large part because Apple Inc. last year raised the price of top selling tunes to $1.29 from 99 cents.

The price hike by Apple, which commands roughly 70% of the market for digital music downloads, may have slowed the number of songs people bought, but it resulted in an increase in overall revenue, which last year climbed to $2.24 billion, up from $2.03 billion in 2009. David Bakula, an analyst with Nielsen Soundscan, hinted at this outcome earlier this year when the company released its 2010 report, which reports only unit sales, not dollar amounts.

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The uptick may not hold. Amazon.com Inc. on Thursday launched a price war, announcing it had sliced the prices of top-selling tunes to 69 cents from 89 cents. Many of the songs, including Katy Perry’s ‘E.T.’, Jennifer Lopez’s ‘On the Floor’ and Lady Gaga’s ‘Born This Way,’ cost $1.29 on Apple’s iTunes. You can read more about this price war in the Times’ Pop & Hiss music blog.

Revenue from digital music subscriptions from services such as Rhapsody, eMusic, Rdio, MOG, Slacker and Napster fell 5.7% last year to $201 million, down from $213.1 million in 2009.

Combined, digital and physical music sales slipped 11% to $6.9 billion in the U.S. last year, roughly half the amount 10 years ago, said Russ Crupnick, music industry analyst at NPD Group.

-- Alex Pham


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