Music buyers turn to digital downloads

Confused digital rights management systems fail to hold back the consumers

Digital sales of music represented 10 per cent of the total worldwide music market in 2007, up from six per cent in 2006, according to In-Stat.

By 2012, digital music sales will represent an impressive 40 per cent of all music purchased worldwide, the research firm forecast.

Factors contributing to this growth include the global expansion of broadband, continued demand for single-track downloads, and expanding music catalogues. Another key driver is the potential for market growth in full-track downloads to mobile handsets in markets other than Japan.

"Digital piracy continues to represent the primary challenge to online music service providers," said Stephanie Ethier, In-Stat analyst.

"Other obstacles still include the lack of interoperability between services and devices due to differing digital rights management (DRM) technologies, and weak consumer demand for subscription-based services. Another potential market inhibitor is the fact that content owners, cellular service providers, and handset manufacturers are increasing the amount of marketing and promotion for mobile music."

Recent research by In-Stat found the following:

  • Sales for online digital music reached $US3.05 billion in 2007, up 48 per cent from 2006.

  • Revenue for worldwide full track mobile downloads will reach approximately $US4.2 billion by 2012.

  • The majority of respondents who accessed online video (72.3 per cent) in 2007 did not pay for the video they saw on the Internet.

    Len Rust is publisher of The Rust Report.

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