Atlantic Records publicly revealed that digital music sales have finally surpassed CDs, with more than 50 percent of music sales now coming from online music downloads.
Atlantic, a Warner Music Group unit, is the first major record label to have digital music sales surpass physical media sales.
"We're like a college basketball team on an 18-2 run," said Craig Kallman, Atlantic chairman and CEO.
In April, industry numbers indicated U.S. consumers still purchase more CDs as opposed to downloading digital music, but several record labels mentioned the gap was closing and digital sales would soon overtake CDs. The milestone is significant because this marks one of the first times a digital technology has helped surpass brick-and-mortar retail revenue for media delivery.
Since Napster helped revolutionize the way music listeners can acquire music, digital music has undergone a great revolution over the past nine years.
Even so, there are dozens of legal music download services available for consumers to choose from: Apple iTunes, Amazon, Napster, Rhapsody, Wal-Mart, etc. iTunes is now the No. 1 online music retailer, with Wal-Mart and Amazon attempting to catch up.
The Recording Industry Association of America (RIAA) has long struggled to adapt to the digital age, and still continues to battle music copyright infringement by launching lawsuits against thousands of file sharers across the U.S.
As digital music continues to steal market share away from physical CDs, the industry will face a sobering reality because the overall market for music continues to shrink.
Information gathered by Forrester Research indicates U.S. music sales in 2013 will be valued at just $9.2 billion, with the number dropping from $10.1 billion in 2008. In 1999, music sales were worth $14.6 billion, the RIAA said.
Record labels will again be forced to branch out and try to find revenue streams from new locations it never had to work with. Dell will work with Universal to offer music bundles on new Dell PCs, while Nokia will work with several music labels to have preloaded tracks and music downloading built into new mobile phones.
