Atlantic Records Says Digital Sales Trump Physical CD Revenues

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The moment where the MP3 has supplanted the CD as the music industry's centerpiece may have finally arrived, at least at Atlantic Records, where the company reported that digital sales accounted for 51% of its revenues. Atlantic is the first label to reveal that their digital sector — comprised of song downloads, ringtones and the like — outsold their physical CDs. "We're like a college basketball team on an 18-2 run," Atlantic's chairman Craig Kallman said in an awkward, failed sports analogy. All told, Atlantic's parent company Warner Music Group saw their digital revenues rise by 39% to $639 million in the previous fiscal year. Making Atlantic's digital achievement even more stunning is the fact that their biggest album of the last year and a half, Kid Rocks Rock N' Roll Jesus, wasn't available via top digital retailer iTunes and was only recently available on Rhapsody. So does this mean that record labels are finally adapting to the ever-changing industry? "I think we've figured it out," said Julie Greenwald, president of Atlantic Records. "It used to be that you could connect five dots and sell a million records. Now there are 20 dots you can connect to sell a million records."

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