Early January is an important time in digital music. Now we get to see how post-2006 Christmas sales stack up to post-2005 Christmas sales. Digital sales peaked two weeks ago with a weekly total of over 30 million. That was a 108% year-over-year increase.

Last week, digital track sales totaled over 21 million, a 29% drop from the previous week but still 61% higher than the same week in 2006. That 29% drop was an improvement over last year's 33% decline. In other words, sales are higher and are not dropping off the holiday peak as quickly as last year.

Let's look forward to next week. If next week's sales decline mirrors that of last year, which was 26%, the total will be about 16 million -- versus just under 10 million last year. That's 60% higher year-over-year and six million greater in units. In two weeks sales should have levelled off completely and decent forecasts can be made for sales throughout 2007. We'll have a better clue as to whether or not the current sales level is nothing but redeemed gift cards and if it may fall even further once people have to spend their own money.