US Digital Music Sales to Surpass CDs in 2012
Posted: Mon Apr 25, 2011 8:56 amhttp://www.piracynetwork.com/piracy-new ... -2012.html
Strategy Analytics predicts that physical CD sales will decline by nearly a third this year, and that combined with a growth of digital music revenues expected to reach $2.7 billion will for the first time put digital music sales on top.
According to Strategy Analytics, a market forecasting firm, by next year US consumers will for the first time spend more money purchasing digital music than they will physical CDs.
In the report, entitled “Global Recorded Music Market Forecast,” its Digital Media Strategies service says that physical CD revenues, which already plunged 16% to $3.8 billion last year, will decline an additional 29% this year to $2.7 billion.
Meanwhile, it says that digital music revenues will continue to grow, reaching $2.8 billion next year, and therefore surpassing CD sales for the first time.
“Digital music is not developing as fast as expected,” says Martin Olausson, Director of Digital Media research at Strategy Analytics. “While online revenues will expand further over the coming years, the overall size of the recorded music industry will continue to contract as record companies struggle to identify growth strategies.”
Strategy Analytics predicts that while single track downloads will remain the single most important source of digital music revenue, advertising and subscription models will become increasingly important over the next five years.
It says that by 2015 we can expect the following breakdown of revenues:
•39% – single track downloads
•32% – album downloads subscription
•14% – subscription
•14% – advertising
“Music companies must look beyond download-to-own for digital revenue growth,” says Jia Wu, Senior Analyst. “With rapid adoption of connected devices and ubiquitous broadband, music fans will expect greater flexibility and wider consumption choices.
The report ought to bolster critics of the music industry’s war on illegal file-sharing as it illustrates that consumer tastes are what is largely behind the decline in physical CD sales; and since digital music is cheaper and affords more options to “cherry pick” content the revenues will never equal one another.
Stay tuned.
Strategy Analytics predicts that physical CD sales will decline by nearly a third this year, and that combined with a growth of digital music revenues expected to reach $2.7 billion will for the first time put digital music sales on top.
According to Strategy Analytics, a market forecasting firm, by next year US consumers will for the first time spend more money purchasing digital music than they will physical CDs.
In the report, entitled “Global Recorded Music Market Forecast,” its Digital Media Strategies service says that physical CD revenues, which already plunged 16% to $3.8 billion last year, will decline an additional 29% this year to $2.7 billion.
Meanwhile, it says that digital music revenues will continue to grow, reaching $2.8 billion next year, and therefore surpassing CD sales for the first time.
“Digital music is not developing as fast as expected,” says Martin Olausson, Director of Digital Media research at Strategy Analytics. “While online revenues will expand further over the coming years, the overall size of the recorded music industry will continue to contract as record companies struggle to identify growth strategies.”
Strategy Analytics predicts that while single track downloads will remain the single most important source of digital music revenue, advertising and subscription models will become increasingly important over the next five years.
It says that by 2015 we can expect the following breakdown of revenues:
•39% – single track downloads
•32% – album downloads subscription
•14% – subscription
•14% – advertising
“Music companies must look beyond download-to-own for digital revenue growth,” says Jia Wu, Senior Analyst. “With rapid adoption of connected devices and ubiquitous broadband, music fans will expect greater flexibility and wider consumption choices.
The report ought to bolster critics of the music industry’s war on illegal file-sharing as it illustrates that consumer tastes are what is largely behind the decline in physical CD sales; and since digital music is cheaper and affords more options to “cherry pick” content the revenues will never equal one another.
Stay tuned.
