Widespread broadband adoption combined with the digitisation of music and the emergence of portable digital music players is fundamentally changing the music sector, with industry experts projecting the sector to enjoy a period of strong growth over the coming years.
eMarketer’s latest report,
Online Music: Downloads, Streaming, Radio, Mobile, shows that listeners are changing the way they buy, store, share and listen to music, with an increasing amount of music sales being conducted online.
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%.
eMarketer reveals that despite a declining audience, broadcast radio still dominates the listening arena, with 194 million using the medium in 2005, compared to 77.2 million listening to music stored on a computer, and 53.5 tuning into online radio.
Recent data from Nielsen//NetRatings shows that 61.9 million people visited online music sites in April 2005, with male visitors slightly outnumbering females. Approximately 60% of visitors were found to be less than 45 years of age, with the majority having a household income of over $50,000. Young adults aged 18-24 are interested in music subscription services far more than any other age group.
Commenting on the online music research, Ben Macklin, senior analyst at eMarkter and author of the report said: “Widespread broadband access and the growing popularity of digital audio players have been important drivers for the online music sector.”
He continued: “By the end of 2005 there will be over 41 million broadband households in the US and an almost equal number of digital audio players in the market. iTunes and iPods go hand in hand, and with the recent phenomenon of podcasting and the growing popularity of satellite radio, on-demand audio entertainment has moved to the next level.”
In the US, satellite radio is predicted to reach more than 20.1 million households by 2010, up from 4.5 million subscribers at the end of 2004, according to Forrester Research (see Satellite Radio To Reach Over 20.1 Million US Households By 2010).
Satellite subscriptions were shown to enjoy a 150% increase between 2003 and 2004, with Forrester’s report, The Future of Digital Audio, forecasting nearly half of all US households with broadband and 30% of all US households, will be tuned into online radio by the end of the decade.
This research confirms earlier findings from market research firm In-Stat, who predicts satellite radio to enjoy massive growth in the US over the next few years, with an estimated 9 million new subscribers by 2008 (see Digital Radio Forging Ahead).
However, a recent survey from The Media Audit claims that satellite radio is actually failing to attract the expected audiences in the US, with the medium performing poorly in terms of penetration rates (see Satellite Radio In US Fails To Penetrate Markets).
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