Conventional music media looks set to dominate the North American and Western European markets until the end of the decade, despite the strong emergence of digital music sales, according to a new study by Strategy Analytics.
Overall music revenues in North America are expected to reach $15 billion by 2010, up from $13 billion in 2005, while revenues in Western Europe are predicted to hit $14 million, up from $11 million during the same period.
The report forecasts that conventional music sales will still be the standard bearer for the music market in 2010, although some of its share looks likely to be eaten away by other forms over the coming years.
Strategy Analytics projects the ring tone market in Western Europe to increase, with online music predicted to expand greatly and account for $2.1 billion in revenues, matching the ringtone sector in size. Mobile music is forecast to generate just $500 million in revenues.
North America’s conventional music market looks set to suffer a slight decline in revenues between 2005 and 2010, dropping from $11.4 billion to $11.0 billion. Online music, on the other hand, will enjoy a substantial increase, with revenues almost doubling during the time period.
Looking at the two markets, digital music will account for nearly 30% of music revenues by 2010, compared to 13.9% in 2005.
Recent figures from the International Federation of the Phonographic Industry (IFPI) reveal that world-wide sales of music via the internet and mobile phones generated sales of $1.1 billion in 2005, up from just $380 million in 2004 (see Digital Music Sales Reach $790 Million).
The IFPI claims that digital music now accounts for 6% of record companies’ revenues, up from practically zero two years ago.
Widespread broadband adoption, combined with the digitisation of music and the emergence of portable digital music players, is fuelling the dramatic take up of digital music.
According to eMarketer’s, Online Music: Downloads, Streaming, Radio, Mobile, report, consumers are changing the way they buy, store, share and listen to music, with an increasing amount of music sales being conducted online (see Digital World Transforming Music Industry).
Estimates of online digital music sales from PricewaterhouseCoopers (PwC) and Jupiter Research both show impressive growth in the sector, with PWC forecasting a bullish annual growth of 89.1% between 2004 and 2008, compared to Jupiter’s less optimistic prediction of 52.2%.
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