The Australian music industry fell 13.64% in value in the first half of 2007, despite continuing strong sales of domestic repertoire and digital music.

According to Australian Recording Industry Assn. (ARIA) figures released today (Monday), total physical unit sales for the first six months hit 20.7 million units, down 15.72% from 24.6 million last year. Physical sales had a total value of $167.8 million Australian ($138.6 million), down 17.34%.

But combined digital and physical sales equaled 36.6 million units with a dollar value of $185.9 million Australian ($153.5 million), representing a 11.16% rise in unit sales despite the dollar value decline.

Meanwhile, sales of downloads and ringtones rose by 89.67% compared to the same period last year, although the dollar value only rose by 47.48% to $18.1 million Australian ($149.57 million). Digital sales now total 15.9 million units.

"Digital sales now account for 9.75% of the recorded music market by value," says the association's Sydney-based CEO Stephen Peach. "This compares favorably to the 5.5% overall value reported for the same period last year."

ARIA's figures indicate that consumers are downloading singles but prefer to buy their albums on CD format. Single digital tracks saw a 61.6% rise to nearly 8 million units. This represented a 63.73% rise in dollar value to $8.3 million Australian ($6.8 million). In comparison, CD singles dropped by 47.02% to 1.3 million units, representing a 46.83% drop in dollar value to $3.6 million Australian ($2.9 million).

A positive note for labels was the continuation of strong consumer support for homegrown acts. Their retail album sales now represent 34.8% of the Top 100 albums chart for the period, up from 31.8%. Singer songwriter Missy Higgins (Eleven/EMI), rock band Silverchair (Eleven/EMI), "Australian Idol" winner Damien Leith (Sony BMG), rock band Powderfinger (Universal) and roots act the John Butler Trio (Jarrah/MGM) are among the Top 10 big sellers of the year to date.

Despite slumping CD sales, Peach expects a strong second half release schedule -- including albums from multi-platinum Australian acts Keith Urban, Kylie Minogue and Rogue Traders -- to make up lost ground.

"Record companies are expecting a strong second half of big name titles," he says, "And we expect to have a growth similar to the 8% growth we had for the whole of 2006."