With 2007 now under wraps, CD sales figures are starting to come in, and things don’t look good for the labels.

Variety.com is reporting that CD sales during the Christmas shopping season were down 21% from 2006.

From the week of Thanksgiving up through the day before Christmas Eve, 83.9 million albums were sold, a decrease of 21.38 million from 2006’s 105.28 million.

What this doesn’t take into account is the sale of gift cards for downloads. I received an iTunes gift card for $25 as a Christmas gift and have yet to spend it. That’s the equivalent of 2-2.5 albums depending on how you count. The thing is, I won’t spend it all at once, and I most probably won’t purchase entire albums when I do spend it.

These declining sales numbers don’t necessary represent the current state of affairs for the bluegrass industry, though I have heard a number of artists speak of drooping CD sales in the last year. The decline of major label CD sales will affect our little niche in the industry though.

As sales continue to decline, at some point retailers will decide they have a better use for floor space than CDs. When retailers like Wal-Mart start shrinking the amount of shelf space dedicated to CDs, the sales will slip even further since the consumer won’t be able to find the CD they’re looking for in the store. My guess is, this will drive even more people online in their search for music to purchase.

A good selection of bluegrass music isn’t readily available in most retail stores as it stands, and when they start cutting shelf space, bluegrass will probably be one of the first genre’s to get pulled. The downside for our industry is that the music might not be available online either, which means it simply doesn’t get purchased.

If a large and varied selection of bluegrass were available online from retailers such as iTunes and Amazon, we’d still have to compete for the consumer’s attention, but at least we’d have a chance.

So let’s have a poll. How many of us received a CD or download gift card for Christmas?