ANALYSIS
MP3s: The New 45 Singles of the Music Business

Back in the 1950s, Elvis Presley and other recording artists put out plenty of hit singles like "Heartbreak Hotel" and "Hound Dog," and consumers clamored for the tunes. By the 1960s, with the success of "The Beatles (The White Album)" and blockbusters from other big groups, the album became the main medium of music sales .

Now, because of digital downloading technology and the Internet, the single is making a smashing comeback. For example, a wacky song called "Laffy Taffy" by the Atlanta rap group D4L was first thought to be a novelty song, and nothing more, by music producers.

It turns out, however, that the song has been downloaded -- for a fee -- more than 700,000 times from iTunes, Yahoo Music and other online music stores, according to Nielsen SoundScan, which tracks online music sales.

MP3s, New 45s

During the final week of 2005, "Laffy Taffy" set a new one-week sales record for a digital single, with 175,000 copies sold -- more than twice the previous mark set by Kanye West's "Gold Digger," which, by the way, is a Grammy-nominated song.

MP3s have replaced 45s, and iPods have replaced turntables, it seems.

Though sales of full-length albums declined by 7.2 percent last year, sales of digital singles grew by 150 percent, with 352.7 million individual songs sold online, SoundScan said.

What's amazing about all this is that it was the highest figure for singles sales in more than 30 years, according to the Washington D.C.-based Recording Industry Association of America (RIAA).

Weekly digital singles sales surpassed CD sales for the first time ever during the waning weeks of December 2005, as Americans bought 19.9 million digital tracks and 16.8 million albums, reported Nielsen SoundScan.

The average single sells for 99 US cents. Downloadable albums sell for an average of $10. Last year, consumers bought 16.2 million digital full-length albums, SoundScan said.

Overall, albums accounted for about 62 percent of all U.S. music sales, and digital singles attributed 35 percent to the industry's figures, according to Nielsen SoundScan.

Just a few years ago, albums represented 90 percent of all U.S. music sales.

Big Shift

There is some downside with all this for at least one segment of the music industry population: the artists. Recording artists usually earn between 14 and 24 cents on the sale of a 99 cent music single. They earn a lot more -- $2 -- for the sale of each CD.

Despite this, some musicians are changing their music marketing strategies to meet surging single demand.

A California group called Lifehouse has sold 887,000 digital copies of its hit "You and Me" -- many more copies than of its album. That works out to approximately $212,000 in income for the group on just this digital single alone.

Clearly the digital music revolution is gaining momentum worldwide. Global sales of music via the Internet and mobile phones hit $1.1 billion last year, almost triple 2004 sales and accounting for 6 percent of global record distributors' sales, an industry group reported recently.

In fact, the International Federation of the Phonographic Industry (IFPI) said that in Europe's two biggest digital markets -- Britain and Germany -- more music fans are now legally downloading music than illegally file-swapping.

"2005 was the year that the digital music market took shape," said IFPI's chairman, John Kennedy.