Digital downloads helped the music industry end 2006 on a positive note. A Nielsen SoundScan report released Thursday showed music purchases in the U.S. exceeding 1 billion units for the second straight year as downloads continued to compensate for declining CD sales.

According to the report, which tracks data from more than 20,000 retail locations and from every major digital music seller, 1.2 billion units of albums, singles, music videos and digital tracks were sold in 2006, up 19.4% from the 1 billion units sold in 2005.Although total albums sold — including digital ones — fell 4.9% from a year earlier to 588.2 million, the decline was partly offset by a big increase in digital tracks sold, up from 352.7 million in 2005 to 581.9 million in 2006.

The growth figures are nothing to scoff at, said Brian Garrity, senior business correspondent at Billboard Magazine.”We are seeing a growing tide of digital consumers,” he said. “I think we’re going to see some healthy gains for the foreseeable future.”

The growth decline in CD sales and large growth in single sales suggests that digital consumers are creating their own greatest hits collections of tracks over the traditional idea of an album.

via Los Angeles Times