Consumer education programs expand digital music market

Digital music that can be downloaded from wireless or online services will become more popular over the next five years, according to an IDC report released early this month. The combined revenue raised by music service providers (MSP) is expected to reach $202 million in 2010, contributing a whopping 30 per cent to total music sales that year.

To reach the projected figure, the market for digital music will have to grow at a compound annual rate of 82.5 per cent from the $10 million produced last year. Growth in the wireless and online music services will be driven by a number of factors.

Broadband penetration is expected to increase from 33 per cent in 2005 to 60 per cent in 2010. High-speed Internet will make downloading music from online providers more convenient, hence boosting the popularity of MSPs.

Also contributing to the growth of online music services is the increasing availability and accessibility of portable MP3 players. While IDC recorded only 1.95 million MP3 units that were shipped to Australia last year, analysts predict shipments to reach 3.52 million by 2010.

The paid online music environment currently has several advantages over the wireless music environment. However, Sophie Lo, IDC analyst for Consumer Digital Markets, stressed the importance of music servers as revenue generating avenues for wireless operators.

Voice call charges are limited by capped price plans and close price competition, she said, and wireless operators must look beyond voice revenue for revenue growth.

And while current mobile technology may not be terribly user-friendly, 3G technology will continue to advance and pervade the market. IDC expects revenue generated by wireless music services to catch up with that of paid online downloads by the end of the decade.

Whether wireless music services will become more popular than their online counterparts is a different question. According to Lo, this will not be possible for a long time yet.

"There are a lot of issues that wireless services have to overcome before overtaking online services," she explained. "Wireless platform is not the ideal platform for hosting a lot of music, [while] iTunes has a catalogue of over one million songs."

As such, wireless music providers will tend to host only popular mainstream songs, while paid online services will continue to cater to a wider range of musical tastes. Resellers also stand to benefit from the growth of both sectors, especially if they are able to aid consumers in adopting the different flavours of digital music.

An IDC survey conducted in 2005 revealed that 31 per cent of Australian home consumers are completely ignorant to where digital music can be downloaded from. Apple clearly dominated the market, with over 40 per cent of survey participants subscribed to iTunes. The remaining participants were spread over services such as Telstra BigPond music (20 per cent), ninemsn (9 per cent) and other smaller services.

Brand recognition is a major factor in the success of iTunes and iPods, said Lo, and consumers need to know about other digital music sources before MP3 units that support other formats, such as wma and Atrac, gain popularity.

"There is a strong correlation between electronic content and electronic devices," Lo said. "Resellers should provide some very basic consumer education to show consumers how to [access electronic content] from searching for music, to downloading, to listening."

Join the newsletter!

Error: Please check your email address.
Rocket to Success - Your 10 Tips for Smarter ERP System Selection
Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Liz Tay

PC World
Show Comments



Sansai 6-Outlet Power Board + 4-Port USB Charging Station

Learn more >

Victorinox Werks Professional Executive 17 Laptop Case

Learn more >



Back To Business Guide

Click for more ›

Brand Post

Most Popular Reviews

Latest Articles


PCW Evaluation Team

Louise Coady

Brother MFC-L9570CDW Multifunction Printer

The printer was convenient, produced clear and vibrant images and was very easy to use

Edwina Hargreaves

WD My Cloud Home

I would recommend this device for families and small businesses who want one safe place to store all their important digital content and a way to easily share it with friends, family, business partners, or customers.

Walid Mikhael

Brother QL-820NWB Professional Label Printer

It’s easy to set up, it’s compact and quiet when printing and to top if off, the print quality is excellent. This is hands down the best printer I’ve used for printing labels.

Ben Ramsden

Sharp PN-40TC1 Huddle Board

Brainstorming, innovation, problem solving, and negotiation have all become much more productive and valuable if people can easily collaborate in real time with minimal friction.

Sarah Ieroianni

Brother QL-820NWB Professional Label Printer

The print quality also does not disappoint, it’s clear, bold, doesn’t smudge and the text is perfectly sized.

Ratchada Dunn

Sharp PN-40TC1 Huddle Board

The Huddle Board’s built in program; Sharp Touch Viewing software allows us to easily manipulate and edit our documents (jpegs and PDFs) all at the same time on the dashboard.

Featured Content

Product Launch Showcase

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?