Sales of CDs in the US have fallen by 20% in the last year, according to research company Nielsen Soundscan.
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Eighty-nine million CDs were sold in the first three months of 2007, compared with 112 million during the same period in 2006.
The growth in digital music failed to compensate, with album sales dropping by 10% overall.
Soundscan counts every 10 downloads as a "digital album" as music fans tend not to buy complete albums online.
Around 288 million individual songs were downloaded in the first three months of 2007, up from 242 million in the same period last year.
Fans 'in control'
"It comes back to consumers being in complete control of their media experience," music industry analyst Michael McGuire of Gartner Research told the Agence France-Presse news agency.
Mr McGuire said fans were sending artists a message: "While you may have put a lot of thought into the sequence of the album, I only like these three songs."
But the digital market is a long way from overtaking the traditional record store - 90% of all albums are still sold as CDs.
Nielsen Soundscan compiles the official US charts for Billboard magazine.