The online music market is expected to enjoy healthy growth over the rest of the decade, with worldwide sales projected to reach $10.7 million in 2010, up from $1.5 million in 2005.
According to a new report from In-Stat, revenue from downloaded music will outpace revenue from physical media bought online by 2007. The high-tech market research firm claims that this is further evidence that the internet is now a key distribution channel for digital music.
Commenting on the report’s findings, Stephanie Guza, In-Stat analyst, said: “Consumers are clearly opting for legal ways to purchase music, and more legitimate sites are available. Vendors still face significant obstacles including internet piracy, interoperability concerns, and the unlicensed use of digital streams.”
In-Stat revealed that nearly half of the survey respondents admitted to downloading music from the internet, with 64% paying for the music. iTunes was the most popular site, with 53% of music purchasers having used the site.
Mobile phones are another platform evolving in the mobile music arena. According to Informa Telecoms & Media, the continuing penetration of 3G technology has led to an increase in downloading music files to handsets (see Outdoor Advertising Outpacing Other Media).
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).
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% (see Digital World Transforming Music Industry).
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