The International Federation of the Phonographic Industry (IFPI) released a new report indicating global music sales dropped 89% last year, down to $18.42 billion, with declining sales in the United States cited as the primary cause.

Digital music sales have increased dramatically, but CD sales have dropped 15 percent, with CD sales still serving as a cash cow for the industry.

CD and vinyl sales dropped 15% internationally and 31% in the US. MP3 and other digital music sales, including ringtones, increased 24% across the world but still don't make as much money as the record labels would like.

Music listeners now tends to buy one or two tracks online, rather than purchase the entire album. For example, U.K. users downloaded 110.3 million individual tracks in 2008, but only 10.3 million entire albums were downloaded, according to the Official Charts Company.

Digital music sales increased 24% across the world, helping record labels net $3.78 billion.

The silver lining is that the amount of money record companies received from TV and radio royalties increased more than 16% up to $802 million. Most of the money was collected in Europe, with European copyright holders collecting $576 million.

Story filed 27.04.09