Digital Sales Will Account for 40% of Music Purchases by 2012
Digital sales of music represented 10% of the total worldwide music market in 2007, up from 6% in 2006, reports In-Stat (http://www.in-stat.com). By 2012, digital music sales will represent an impressive 40% of all music purchased worldwide, the high-tech market research firm says. Factors contributing to this growth include the global expansion of broadband, continued demand for single-track downloads, and expanding music catalogues. Another key driver is the potential for market growth in full-track downloads to mobile handsets in markets other than Japan, which currently is the primary market for this type of digital music format.
Digital piracy continues to represent the primary challenge to online music service providers. Other obstacles still include the lack of interoperability between services and devices due to differing digital rights management (DRM) technologies, and weak consumer demand for subscription-based services. Another potential market inhibitor is the fact that content owners, cellular service providers and handset manufacturers are increasing the amount of marketing and promotion for mobile music.
Recent research by In-Stat found the following:
Sales for online digital music reached $3.05 billion in 2007, up 48% from 2006.
Revenue for worldwide full track mobile downloads will reach approximately $4.2 billion by 2012.
The majority of respondents who accessed online video (72.3%) in 2007 did not pay for the video they saw from the Internet.
This Market Alert is drawn from the In-Stat research, Revenue Opportunities Abound Worldwide in Online and Mobile Music Distribution (#IN0804027CM), which covers the worldwide market for online and mobile music distribution. It provides analysis of the current online and mobile music marketplaces, emerging opportunities, and results from an In-Stat consumer survey. It includes forecasts for digital distribution sales by region, physical media bought online, and total music sales through 2012.
This research is part of In-Stat’s Consumer Media and Content service. “Content is King,” and as digital content evolves it drives a rapidly shifting market place, which demands large investments in unproven products and services. In-Stat too has made investments to cover the consumer media and content markets, enlisting a half-dozen seasoned In-Stat analysts who contribute to this service throughout the year, leveraging In-Stat’s wide breadth of research practices. Consumer Media & Content (CMC) provides invaluable insights into how new delivery methods and business models will influence the evolution of the media value chain end-to- end. CMC also addresses the creation, acquisition, distribution, and use of digital content (audio, imaging, video, and voice), and how it fits into the evolving consumer’s digital entertainment lifestyle.
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