The Economist is sounding the death knell, or at least, the warning bells, for the music industry. To review, take a look at the numbers, quoted from the article:

- In America, according to Nielsen SoundScan, the volume of physical albums sold dropped by 19% in 2007 from the year before—faster than anyone had expected.

- For the first half of 2007, sales of music on CD and other physical formats fell by 6% in Britain, by 9% in Japan, France and Spain, by 12% in Italy, 14% in Australia and 21% in Canada.

- Paid digital downloads grew rapidly, but did not begin to make up for the loss of revenue from CDs. More worryingly for the industry, the growth of digital downloads appears to be slowing.

"In 2007 it became clear that the recorded-music industry is contracting and that it will be a very different beast from what it was in the 20th century," says Mark Mulligan, an analyst at JupiterResearch.

The article doesn't mention it, but the most interesting development of late is how the four major record labels have finally dropped DRM, but aren't inviting Apple to the DRM-free party. EMI is still the only label to sell unprotected music in the iTunes Store. The others are clearly ganging up on Apple by propping up the Amazon MP3 store and other places, in an effort to starve Apple and create some additional viable competitors. And probably to get back at Jobs for being so stubborn.

From major to minor [The Economist]