On the good news side, overall music sales – albums, singles, music video, digital tracks – were up 14 percent from 2006. The number of units sold was 1.4 billion vs the previous year’s 1.2 billion.

But once you dig into the numbers it becomes apparent that music downloads experienced growth while physical CDs remained on the decline. And, like previous reports over the past year, although download sales are growing, online music sales have yet to make up for the lack of sales for music packaged in traditional media.

For example, digital album sales went up 53 percent as 2007 ended with 50 million sold compared with 32.6 million in 2006. However, total album sales, including CDs, cassettes, vinyl and digital downloads, dropped 15 percent in 2007 as music consumers purchased 500 million vs 588.2 million in 2006.

Overall album sales, including digital track equivalents where 10 tracks are counted as an album download, were also in decline in 2007, a 9.5 percent drop that saw the year end with 584.9 million sold compared with 646.4 million the previous year.

The number of physical albums purchased from Internet e-commerce sites experienced a slight bump, rising 2.4 percent to arrive at 30.1 million by the end of 2007 compared with 29.4 million in 2006. But that wasn’t enough to help offset the 15 percent decline in total album sales, which includes physical media as well as downloads.

In short, downloads are up, physical sales are down, and downloads are not picking up the slack of lost sales.

On the digital side, album downloads went up 53 percent, selling 50 million units in 2007 vs 32.6 million in 2006. Digital track sales also had a hefty increase, rising 45 percent to 844.2 million compared with 581.9 million in 2006.

Nielsen SoundScan says 20 percent of total album sales occurred during the last six weeks of the year. This shouldn’t surprise anyone, as the holiday season is famous for increased music sales.

But what is surprising is that music sales exceeded 58.4 million during the final week of 2007. According to Nielsen SoundScan, that’s the biggest sales week for music … Ever! Or at least in the history of Nielsen SoundScan.

Why are music sales on the decline? Music piracy is still the obvious response as the labels continue to search for an answer as to how the industry can compete with free, albeit illicit, music. However, there are other entertainment options competing with music dollars, including movies, sports events, video games and even video games built around music, such as Activision’s “Guitar Hero 3” and MTV’s “Rock Band.”

And the world is filled with self-identified music experts claiming that labels are dinosaurs that still don’t recognize the warning signs of extinction. But even that declaration seems too simple an answer when pondering the music industry’s future.

Maybe the only certainty is that some music sales figures will get worse before they get better. And even that’s uncertain.