The global value of music sold via the Internet is predicted to rise from $1.88 billion in 2004 to more than $6 billion in 2010, according to a new report.
Research recently published by London-based research firm Informa Media Group suggests that the share of music sales online will grow from 4.6% of total sales in 2004 to 15.2% in 2010. Global revenues accumulated from digital music activity will top $3.1 billion in 2010, accounting for about 7.7% of overall music sales, Informa illustrates in the 5th edition of its publication “Music on the Internet.”
Over the coming years, the United States is expected to continue to be the dominant market in terms of consuming music via the Internet. Total U.S. online sales are forecast to rise steadily from $814 million in 2004 to $2.44 billion in 2010. Comparatively, digital music sales are expected to account for $232 million in the United States this year, rising to $1.34 billion in 2010.
Bolstered by a high-rate of broadband penetration, American consumers are currently downloading about 3 million tracks each week, says the report’s author Simon Dyson. According to statistics from the International Federation of the Phonographic Industry, 23% of U.S. households had broadband connection in 2003. About 61% of U.S. households were connected to the Internet in 2003.
While the digital music space will continue to grow and mature, Dyson is confident that consumer demand for physical CDs will remain strong. “I think that the digital and physical products will be largely complementary,” Dyson says.
Informa’s research also acknowledges the music industry’s ongoing battle with peer-to-peer files sharing. “Converting the P2P file-sharers is still central to the long-term success of the industry,” notes Dyson. “Many millions of music fans still prefer to download for free even though the legal services offer such good value.” Informa estimates the value of lost sales to the industry in 2004 remained unchanged at about $2.1 billion.