Digital Music Market Doubles
Digital music sales are jumping.
New reports from two major research sources indicate that worldwide digital music sales are continuing to climb.
Nielsen SoundScan captured more than 675 million digital track sales worldwide in 2006, with nearly 600 million digital track sales in North America alone, up from 359 million in 2005.
The IFPI “Digital Music Report 2007″ estimates that worldwide digital music sales revenues doubled in 2006 to around $2 billion.
As record companies continue experimenting to find the right balance of distribution models and digital music products, digital sales already account for roughly 10% of the music market.
“The record industry today has evolved into a digital thinking, digitally literate business,” said IFPI CEO John Kennedy. “We expect at least one quarter of all music sales worldwide to be digital.”
The chief beneficiaries of the change sweeping through the industry are consumers. They have effectively been given access to 24-hour music stores with unlimited shelf space, and they can consume music in new ways and formats — an iTunes download, a video on YouTube, a ringtone or a subscription library.
However, despite its success thus far, the music industry has not yet achieved the “holy grail” — where digital sales compensate for the decline in CD sales.
At the same time, digital piracy and the devaluation of music content are real threats to the emerging digital music business. In fact, digital piracy is still a massive problem for the music industry and one of the major reasons that the surging legitimate digital market is not expected to make up for the shortfall caused by the decline of the physical market in 2006.
For information on another growing audience, read eMarketer’s Internet Video Audience report.
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