Labels Find Profits Despite Declining Sales

The New York Times took a look at how labels are finding profits despite declining sales:

"...Warner Music executives provided cost-analysis data from a successful hip-hop record released in the last 12 months. The information was disclosed on condition that the performer not be identified..."

"...sales of the CD accounted for roughly 74 percent of domestic revenue the company took in from the project, or roughly $17 million. But sales of an array of digital products added almost $6 million — about two-thirds of that came from ring tones of hit singles. The figure also included roughly $330,000 from mobile phone games related to the performer and $94,000 in sales of cellphone “wallpaper,” or screen backgrounds." (more)

In a marketplace where file sharing has decimated CD sales and single track downloads have accelerated the slide, labels are finally finding profits in quick single hits and cell phone novelties.  Some might applaud the record execs for their adaptability while others will question what it means for music and artist development. (We'd love your comments.)