Atlantic Records announced more than half of its music sales in the U.S. now derive from digital products including iTunes downloads and ringtones, heralding the first time a major label's digital revenues have surpassed traditional media formats. Atlantic--a unit of Warner Music Group and home to artists past (Ray Charles, Led Zeppelin) and present (T.I., Kid Rock)--reports digital sales now account for 51 percent of revenues; WMG (which also includes subsidiaries like Rhino Entertainment and Ryko Corporation) said Tuesday its digital revenues for the full fiscal year increased 39 percent to $639 million, or 18 percent of the company's total revenue. Warner beat Wall Street expectations by reporting Q4 net profits of $6 million--revenue fell 1 percent to $854 million.

Despite Atlantic's digital surge, the music industry has largely given up on hopes that digital revenues would eventually offset the declining sales of physical media. Market analysis firm Forrester Research estimates music sales in the U.S. will slump to $9.2 billion in 2013 from $10.1 billion this year. The Recording Industry Association of America notes that music sales totaled $14.6 billion in 1999.

For more on Atlantic's digital growth:
- read this New York Times article [1]

Related articles:
Forecast: Mobile music [2] revenues to $17.5B by 2012
Report: Music phone [3] shipments top MP3 players