Not long ago we reported on another year of declining CD sales within the music industry. So we thought it’d be nice to share the story of increased sales at CD Baby.

CD Baby reports that their CD sales for 2008 increased by 2% over 2007 numbers. Their digital revenue rose by 45% during the same period. 2% doesn’t sound like much, but compared to the 14% drop in the broader music industry, a 2% increase sounds real good.

All of this added up to a 28% increase in the amount CD Baby paid out to artists in 2008.

In total, CD Baby paid out over $34 million to artists in 2008 alone, up 28% from the prior year. That averages out to $228 for every artist with an active album for sale. (Yes, I know, not everyone got paid that much, it’s just an average, but you gotta like that number.) Who’s selling volume? Close to 4,000 clients got paid more than $1,000, and approximately 200 artists got paid more than $10,000.

An average is just that. Some artists made much more than $228, which means many many artists made less than that. Still, let’s not sneeze at an increase in music sales.

$2.4 million of CD Baby’s revenue was taken in through the CC swipers they now offer to bands for use at live shows. Some of that revenue, no doubt, was from the sale of non-musical merchandise.

For the average artist, CD Baby is not going to be the answer to declining revenues…but it could be part of the answer.