When online retailer Insound began offering instant MP3 downloads of albums being ordered on vinyl, only a handful of indie labels were on board for the promotion. But by year's end, nearly 500 titles

When online retailer Insound began offering instant MP3 downloads of albums being ordered on vinyl, only a handful of indie labels were on board for the promotion. But by year's end, nearly 500 titles will be part of the program.

Driving the expansion are partnerships with Sub Pop and Matador, making the complete catalogs of Iron & Wine, the Shins, Wolf Parade available alongside titles from Fleet Foxes, Flight Of The Conchords, Mogwai, Band Of Horses and the Postal Service.

Insound has seen a massive spike in LP sales, both domestically and internationally, coinciding with an overall boom in vinyl purchases.

"The percentage increase over the last 12-18 months in vinyl sales has been dramatic -- close to 100%," Insound co-founder Matt Wishnow tells Billboard.com. "Our gross margins and pricing model for vinyl are the exact same as that for CDs. However, there is one major difference and that is the elasticity of that margin. We don't discount vinyl often because consumers believe that vinyl is worth the suggested price."

Offering two forms of music for one price has been made possible by lenient royalty deals. "Fortunately, a lot of our label partners work with bands that control their own publishing or who have progressive publishers," Wishnow says, allowing Insound to avoid paying mechanical royalties twice for one album.

Insound plans to further its physical/digital product bundles in 2009, including band merchandise such as T-Shirts, posters or tote bags paired with digital downloads for a price in the $20 range.