In-Stat has seen the future of music
April 10th 2008
In-Stat has published a teaser for a larger report ($3,495) with color on the evolving music download biz. The researcher claims that 40% of all music sales will be digital by 2012, up from 10% this year (6% last).
"Digital piracy continues to represent the primary challenge to online music service providers," said analyst Stephanie Ethier. "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."
Factors propelling growth include:
• Global expansion of broadband, continued demand for single-track downloads, and expanding music catalogues
• Potential for market growth in full-track downloads to mobile handsets in markets other than Japan
• Download services, mobile service providers are increasing their marketing
And, here are some industry stats:
• Digital music sales reached $3.05 billion in '07, up 48% from '06
• Worldwide full-track mobile download revenues will reach approximately $4.2 billion by 2012
• The majority of respondents who accessed online video (72.3%) in 2007 did not pay for the video they saw from the Internet
The lads at 9 to 5 Mac have made the leap of faith that Apple will continue to maintain its 70% download market share in 2012 and, thereby, account for 28% of all music sales in that year.
Editor's note: Weak demand for subscription services? Pay forever music sucks, people don't want it.
Also, In-Stat is predicting that download growth rates will continue to slow and that seems reasonable all things remaining equal.
However, I imagine they've predicated their forecast on the continued existence / relevance of the record labels and that might not be wise given the fact that 40% of the market is already "independent" music (ie non-label) and that number is growing and closely tied to downloads.
The tipping point is coming. The only questions are when and how bad will it be for the labels?
What's your take?
Exclusive offer. Limited time only.
