The 2011 end of the year numbers are in! Was 2011 the year when the music industry went back to black?

Well that depends on what numbers you compare and who you ask. The Nielson-Billboard 2011 Music Industry Report indicates that music sales for 2011 are up for the first time in seven years (thanks to lower album prices and Adele), while others claim that the recorded music industry remains “plagued” by declining CD sales with digital revenue failing to make up the difference.

The Nielsen-Billboard reports unit point-of-purchase sales of recorded music product for the 52- week period from January 3, 2011 through January 1, 2012. According to Nielson, total music purchases (including all albums, singles, music videos, and digital tracks) reached the 1.6 billion mark in 2011, representing an increase of 6.9% over 2010. Total album sales, including albums and track equivalent albums, reached 457.7 million units sold. Broken down by quarter, Billboard reported that 111.8 million units were sold in the first quarter, and by mid-year total album sales increased to 155.5 million units sold, up nearly 1% from the nearly 154 million units scanned during the corresponding first half of 2010. Despite these numbers, overall recorded music revenue remains down.

It is no surprise that Adele’s 21 was the top selling album of the year, moving nearly six million units. Her single “Rolling in the Deep” also led the charts for top ten selling digital song, top ten selling digital track, and top played song. Rounding out the top ten were three hip-hop albums: Lil Wayne’s The Carter IV (1.9 million units sold), Drake’s Take Care (1.2 million units sold) and Jay-Z and Kanye West’s Watch the Throne (1.2 million), in addition to two 2011 Grammy darlings (Mumford & Sons and Lady Antebellum) and pop acts Lady Gaga and Justin Bieber. Music insiders attribute 2011’s boost to aggressive marketing efforts, availability and consumer adoption of legitimate digital commerce models, the power of social media.

So what’s projected for 2012? Well, if 2011 is any indication, digital music will continue to be an area of growth. In 2011, digital track sales increased 8.5% over 2010. Digital sales accounted for nearly a quarter of 2011 total albums sales (127.1 million units sold) and many believe that 2012 will be the year when digital sales surpass physical sales. Digital music sales will be needed to off-set declining CD sales (which will likely continue to decline in 2012), if the music industry continues its upswing. Touring, a $4 billion business in 2011, will also continue to increase in 2012. Meanwhile, music streaming will likely be a game changer as record labels and companies such as Spotify and Pandora, continue to modify their business models.