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Growing digital sales helped the music industry increase revenue for the first time since 1999

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Digital music rights
Digital music rights

The transition from physical to digital media hasn't been a pretty one for the music industry, but it seems that the hard times might soon be over. The International Federation of the Phonographic Industry (IFPI), which is a non-profit organization that represents the worldwide recording industry, just announced that music revenues grew in 2012, the first time that's happened since 1999. While that's good news for those who make their money from recorded music, it's a bit early to call this a full turnaround — revenues only grow a tiny 0.3 percent year-over-year.

Still, when you've been on a 13-year downturn, you need to look for good news where you can find it. Digital music sales have unsurprisingly been the primary growth drivers — revenue from digital music (including sales and subscriptions) was up nine percent in 2012. That represented some $5.6 billion, but that only made up 34 percent of overall sales. While digital music is certainly the way of the future, physical media still reigns supreme — and the industry might have a hard time continuing to grow as those sales continue to decline.

Despite digital music's growth, physical media still reigns supreme

As for how those sales break down, the IFPI says that about 70 percent of all digital music revenue comes from purchase and download services like Amazon and iTunes; those download services grew 12 percent year-over-year. Paid subscription services, like Rdio and Spotify, had a big year with 44 percent growth and subscriber counts of about 20 million. The IFPI says subscription services "are expected to account" for more than 10 percent of digital revenue for the first time in 2012; unfortunately, it's not clear where the remaining 20 percent of the digital pie comes from.

As for what drove sales last year, it won't come as a surprise to anyone who has had the good fortune of tuning in to FM radio lately. Adele's 21 moved 8.3 million albums, while Carly Rae Jepsen's "Call Me Maybe" was the top single of the year, with 12.5 million sales.