Apple gets behind the album format with new offer

By Yinka Adegoke

NEW YORK (Reuters) - Apple Inc. (AAPL.O) is throwing its weight behind the music industry's efforts to protect the album format by allowing fans to buy complete digital albums without having to pay again for songs they already own.

The record industry is keen to maintain the profitable album format, which is under threat as users of Web-based music download stores, such as Apple's iTunes and Napster Inc. NAPS.O, prefer to buy individual songs rather than whole albums.

Apple said on Thursday iTunes is introducing a "Complete My Album" service that offers customers who want to turn individual tracks into an album a 99-cent credit for every song they have already purchased from the album.

For example, if a customer had bought three 99-cent singles and decides to download the entire album with a listed price of $9.99, the customer would only have to pay $7.02.

Fans will only be able to take advantage of the discount within 180 days after first buying the songs, Apple said.

The new service comes as the music industry is under pressure to find new ways to boost profits, as sales of digital songs have so far failed to come close to replacing the downturn in revenue from CD sales.

According to Nielsen SoundScan, U.S. album sales in both physical and digital formats fell 10 percent in the first quarter of 2007 compared to the same period a year ago.

Even though digital album sales doubled, CD sales fell 20 percent. CDs still account for 90 percent of traditional album sales.