The International Federation of the Phonographic Industry says U.S. music sales, which are about 40 percent of world music volume, grew 3.9 percent in the first half of 2004, vs. a 12 percent drop during the period last year.

The $32 billion industry showed signs of life with a U.S. fourth-quarter sales spurt of 5.5 percent in 2003, according to the Recording Industry Association of America.

Extending that through the first half of this year means the industry may actually have turned the corner on four years of declines.

Music analyst Josh Bernoff of Forrester Research believes that the industry's decline has "bottomed out," and that U.S. sales will grow to $11 billion this year vs. $10.7 billion in 2003.