03/28/2012 05:27 pm ET Updated Mar 28, 2012

RIAA 2011 Year End Shipment Data Report: Digital Sales King, Physical Sales Continue Decline

The Recording Industry Association of America (RIAA) recently released their report on 2011 Year End Shipment Data, in which states that "total [music] shipments of $7.0 billion were up 0.2 percent when compared with 2010" and that digital formats slightly passed 50 percent of total music shipments in the United States, beating out physical (CDs, vinyl) shipments.

Digital is now officially king.

For the first time, the report includes royalties from "synchronization of recorded music with other content (such as movies, TV, video games, or other media)."

While 0.2 percent isn't a significant number overall, it is a positive increase and does present the RIAA with a potentially tricky situation. Some may wonder how the RIAA will be able to continue pushing for strict anti-piracy bills like SOPA if the current music shipment trends are moving into the black.

This is especially true for digital, which showed a 9.2 percent growth year over year, offsetting the 7.7 percent decrease for physical shipments, which is less than the 10 percent drop from 2001 to 2002, right around the initial rush into file sharing and CD burning.

However, as Ars technica points out, "The RIAA's welcomed news should still be taken with a grain of salt. The industry is still reporting less than half the total value of its high in 1999."

But what 1999 didn't have was a music market where digital downloads netted $2.6 billion (up 17 percent from 2010). That digital sales have increased significantly and physical sales have decreased isn't surprising, but it is significant in that consumers at scale have now chosen digital over physical, and the recording industry will have to continue to attempt to adjust to the consumer mentality of the present and not the past. And according to some industry watchers, the RIAA has been very slow to do so, as evidenced by the harsh responses to RIAA boss's New York Times op-ed in February.

The RIAA report also supports claims by the International Federation of the Phonographic Industry (IFPI) that the global sales music slump is significantly slowing." Digital subscription revenue which grew 65 percent globally to 13.4 million users is an especially telling statistic, and one which was omitted from the digital and physical total units on the RIAA report as mentioned in footnote 7, "Units total includes both albums and singles, and does not include subscriptions or royalties."

The report does make mention in the summary of the increased subscription service as reaching a "new high in 2011 of $241 million, an increase of 13 percent from the prior year," with the number of users growing from 1.5 to 1.8 million, but does not give an explanation as to why digital subscription services are not factored into the total units.

And for those paying attention, sales of vinyl grew 99.6 percent in 2011.