U.S. consumers shied away from compact discs and digital video discs last year, and sales of Internet downloads failed to make up the difference.
Album sales fell 15% to 500.5 million units, market researcher Nielsen SoundScan reported Thursday. In 2006, total sales fell 4.9%.
The figures underscore the industry's failure to combat music piracy with a campaign of lawsuits and threats. Although digital album sales rose 53% to 50 million units, they represented only 10% of the total.
The industry is counting on rising revenue from downloads and mobile phone ring tones to counter the loss of CD sales.
DVD sales fell 4.4% last year, to 1.09 billion from 1.14 billion, marking the first big year-over-year decline for the category since the format debuted in 1997, Adams Media Research said.