CNet News reports that album sales are down:

Tracking firm Nielsen SoundScan, which measures point-of-sale purchases across the United States, said Wednesday that total album sales--including current and catalog titles--fell 7.2 percent from 2004 to 618.9 million units, the lowest since 1996, when they were 616.6 million. After enjoying an "up" year in 2004, prompting predictions that the worst was over, sales flagged during 2005, hurt by competition from illegal downloads, rival forms of entertainment such as video games, and a lack of breakout musical acts.

Notice the blame assigned to illegal downloads? That's kind of contradicted by the upswing in digital sales they also report:

Nielsen SoundScan said overall music sales, which include albums, singles, music videos and digital tracks, jumped 22.7 percent to just over a billion units in 2005. The rise was fueled by a 194 percent increase in digital downloads.

Gee, let me apply a few nano-seconds of thought to this (which is way, way more than the clowns at the RIAA have) - sales of albums down, digital sales up (mostly singles). Looking through my stacks of CD's, mostly purchased years ago, I find that I bought a lot of albums for one song - other than a few favorite artists, it's rare that I like the contents of an entire album. I suspect that most people are the same way.

Now, ten years ago, I had to buy the CD if I wanted the one song. Now? I pop over to the iTunes music store, and grab the one song. My daughter and her friends almost never buy CD's - they get them as gifts, but their first notion is to go online. There were an awful lot of iTunes gift cards sold this year.

What we have here is a changing market. It's really a return to the 1950's music model, when most young people bought singles. The labels really liked the transition to albums, because a $12.00 album contains a lot more profit margin than a $0.99 song download. The insane thing is, they are trying to maintain the dying business model with progressively stupider actions, which makes a resurgence in album sales even less likely. It's time they faced reality.