In this second installment of our interview series regarding bluegrass music sales, we look at how sales of digital music online are trending in our slice of the recorded music world.

Once again, we spoke with Dave Freeman of Rebel Records, Ken Irwin of Rounder Records, Sam Passamano of Rural Rhythm Records and Tom Riggs of Pinecastle Records.

The question we asked was “What trend do you see in sales of digital downloads versus CDs?”

Sam Passamano, Rural Rhythm Records:

“I really don’t look at it as digital downloads vs. CD’s. I look at digital downloads as a product line extension of the album and part of the product mix in a label’s product delivery network to the music consumer. As CD sales decline due to current down tends in music purchases over the past few years, digital downloads have been a source for additional revenues for labels, as well as, a wonderful exposure vehicle for new release products. It’s exciting to see all the artist and new product exposure opportunities available to the consumer today. Consumers can listen to song clips of the entire album, see the artist’s music videos, read about the artist, listen to artist interviews and read album reviews before they choose to purchase the digital download or CD album. Most major ‘brick & mortar’ retailers now have their own digital download sales sites, so I don’t see this as an either or situation.

I think there is a place for both product lines, in most music consumers’ collections. Digital downloads are great for exploring new artists and new release titles and collecting important individual songs that are special to the consumer. However, there is no substitution having the physical CD product in your collection containing all the packaging photo’s and information the artist wants their fans and listeners to have, which truly makes it a better experience for the consumer.”

Ken Irwin, Rounder Records:

“Industry wide, CDs sales were down 15% and digital was up 50%, 2007 compared to 2006. Rounder’s performance exceeded the industry average in both tracks and album downloads. In general, Rounder sells more album downloads than the industry average as we are not a singles-driven label, and our genres are not singles-driven.

Our album vs single ratio has not changed significantly over recent years and our video and radio play drives CD sales, not the sale of tracks.”

Dave Freeman, Rebel Records:

“We see no reason why digital sales won’t continue to grow and conventional CDs will continue to fade. Much of the digital market is for individual tracks, not entire albums.

All in all we have been very pleased with digital results, which have continued to grow substantially.”

Tom Riggs, Pinecastle Records:

“Downloads in our case are almost all single as opposed to full albums. I think it has always been this way. Overall our digital download sales increased about 40% over ‘06.”

Our next post will examine how these labels view the future of the album format, and how their promotional efforts have changed in the face of a rapidly changing market.