|
|
 |
|
|
|
Report: Digital Music Will Pass CD Sales By 2012
CAMBRIDGE, MA -- February 19, 2008: In the flashily titled report "The End of the Music Industry As We Know It," Forrester Research projects that digital music sales will grow at a compound annual rate of 23 percent over the next five years, reaching $4.8 billion by 2012 -- not enough to make up for lost CD sales, which Forrester projects will fall to $3.8 billion over the same period. Half of all music sales in the U.S. will be digital by 2011, the research firm projects.
"Media executives eager to stay afloat in this receding tide must clear the path of discovery and purchase, but only hardware and software providers can ultimately make listening to music as easy as turning on the radio," said Forrester VP/Principal Analyst James McQuivey.
DRM-free music -- unprotected music that works on any digital audio player -- will spread beyond Amazon.com's Amazon MP3 to other sites, Forrester predicts, and allow social networks like Facebook to become music stores, with members selling music to their friends and contacts.
Forrester calls digital downloads "the logistical mass market for the future," but says subscription services, like Rhapsody and Napster, will grow only modestly over the next five years. Meanwhile, the research firm predicts, "Experiments in ad-supported downloads will be silenced by the powerful combination of DRM-free music and on-demand music streaming on sites like imeem.com."
"The industry has to redefine what its product is," says McQuivey. "Music executives have spent years tracking CD sales. But the artist is the product, not just the source of it." He says the industry must look to "unexpected sources" for revenue, including video games where, he says, the labels have so far "failed to capitalize."
Comment on this story
E-mail this story to a friend
Sign up for Radio Headlines
|
|
|
|
|
|
|
From the Publisher
|
|
|
