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Goodbye Raffi, hello hipster!

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Disney banked on the success of High School Musical soundtracks. The first copy sold 3.7 million albums in 2006, claiming a spot as the top musical album of the year and surpassing Raffi's 3 million album sales, according to Nielsen Soundscan. Disney had similar success with Hannah Montana and the Curious George soundtrack, powered by the mellow tunes of surfer-turned-songwriter Jack Johnson.

Kidz Bop, the series that recreates Top 40 hits with the voices of children, released its 14th album last month. The album sales, which total 9 million, sparked a national tour – what Mr. Balsam calls a "children's rock show" – complete with a live band and child performers. Balsam says that parents who bring children can expect a family-friendly atmosphere: The volume is turned down and kids can dance in a tame mosh pit near the stage.

But what's fueling this change in children's music?

"It's a function of there being more music available that's interesting and exciting to kids," Balsam says. "If you look at the Billboard charts and the relationship between children's music and its audiences, there's a very energized audience. Sales are much higher than they have been."

Independent record labels see the potential for growth and creativity. Rockabye's Lisa Roth notes that children's music is "broadening its horizon in that it's appealing to adults as well.... I think it's becoming slightly more sophisticated and respectful."

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