Global online music sales will reach $3.9 billion in 2008, but the market potential is limited because of illegal file sharing, according to a new study from Informa Media Group.
The report,
Music On The Internet, claims that the share of music sales online will rise from 4.5% this year to 11.9% in 2008. Hard format recordings will continue to account for the greatest share of this total (see
Digital Music Revolution Yet To Take Hold, Says Report) but the combined revenues from digital downloads and subscription services will increase to $1.8 billion in 2008.
File sharing on unlicensed sites is a bane to record labels (see Music Industry Must Embrace The Net, Says Study) and with greater emphasis being laid on privacy and anonymity, access to p2p networks is set to grow significantly in the coming years.
Informa Media expects that the music industry will have some success in restricting consumers’ use of illegal networks but high levels of unauthorised music copies will be still be available to exchange online. It is estimated that the value of lost sales to the recording industry will climb from $2.4 billion in 2003 to $4.7 billion in 2008.
Simon Dyson, the author of the report, commented: “The determination of the p2p community to develop services that allow users to share music anonymously will keep a lid on any attempts to develop a legitimate download sector.”
Online music sales are seen in some quarters as a saving grace for the music business (see Legal Downloading To Drive Out CDs And DVDs) but Dyson believes that this has been overstated. He does however have faith in the future of subscription services claiming that there is market for consumers who wish to purchase a-la-carte downloads.
