Digital The Way Ahead For Music Business, Says Forrester
Digital music, currently regarded with some suspicion by record labels, will prove a godsend to the industry and generate more than $2 billion in the US by 2007, according to a new report from Forrester Research.
“Plenty of other causes are viable, including the economic recession and competition from surging video game and DVD sales. But labels will soon discover that there are several simple ways of satisfying today’s sophisticated digital music consumers.”
Digital music revenues are expected to total no more than $15 million this year but Bernoff claims that income will skyrocket once record labels harness the technology and allow single-song and album downloads as well as online subscriptions.
Forrester envisages that downloading will take off in popularity in 2005 as music files will be more accessible by that stage. Impulse buys will become the norm and revenues from single song downloads are set to increase from $6 million this year to $805 million in five years time.
Assuming that artists and labels take advantage of online opportunities, it is estimated that digital music will account for 17% of music revenues by 2007.
| US Digital Music Revenue Forecasts ($ millions) | |
| Year | Revenue |
| 2001 | 3 |
| 2002 | 15 |
| 2003 | 76 |
| 2004 | 256 |
| 2005 | 541 |
| 2006 | 1129 |
| 2007 | 2055 |
| Source: Forrester Research, August 2002 | |
