Music industry execs' biggest wish--that digital sales in the US will compensate for the continued decline of the CD--has nearly come to fruition.

Disney's High School Musical.

Although physical album sales continued to decline in the first half of 2006 in the US, sales of digital albums and tracks made up the difference, pushing the overall business to an improvement of one-tenth of a percentage point over the first six months of 2005, according to figures from Nielsen Soundscan.

In the first half of the year, digital album sales soared 126 percent over the same period last year. A total of 14.7 digital albums were sold in that time, up from 6.4 million units for the same period of 2006.

Meanwhile, 281 million individual digital tracks were sold, a 77 percent jump from 158 million sold in the first six months of 2005.

Physical album sales continued to decline, with 270.6 million physical albums sold domestically through the end of June, a drop of 12 million units--or 4.2 percent--from last year's six-month total of 282.6 million.

The overall business rose a fraction, climbing about one-tenth of a percentage point over the first six months of 2005.

But while paid digital downloads continue to boost the overall music business, peer-to-peer (P2P) file sharing, often cited by the record industry as the primary reason for a decline in sales, also continues to surge. In May 2006, the number of P2P users worldwide that were simultaneously logged on at any given moment was more than 9.7 million, up from 8.7 million in May 2005, according to P2P research firm Big Champagne.

While Coldplay's X&Y was the biggest seller in 2005, Walt Disney's High School Musical soundtrack has been the big winner so far this year, selling 2.6 million copies to date. Rascal Flatts' Me and My Gang is second with just under 2 million units, while UK singer James Blunt's Back to Bedlam (1.7 million), Mary J. Blige's The Breakthrough (1.5 million), and American Idol winner Carrie Underwood's Some Hearts (1.4 million) round out the top five.

Among the four major labels, two of whom hope to acquire one another, Universal Music Group (UMG) continued to be the market leader in the first half of 2006. UMG nabbed 31.6 percent of total album sales, with Sony BMG second with 23.9 percent of the market. Indie labels and distributors, some of whom are owned by the major labels, took third with 19.3 percent, while Warner Music Group grabbed nearly 15.9 percent of the market, and EMI was last with 9 percent.