Digital music sales on the rise: Study

By Giselle Abramovich

April 10, 2008

Music to many ears

People are using the digital channel to buy music, according to a report by In-Stat that found that music sales via digital were $3.05 billion in 2007, comprising 10 percent of the total worldwide music market.

That amount has increased by 6 percent since 2006. In-Stat predicts that digital music sales will represent a whopping 40 percent of all music bought worldwide.

“Digital piracy continues to represent the primary challenge to online music service providers,” said Stephanie Ethier, analyst at In-Stat, in a statement.

“Other obstacles still include the lack of interoperability between services and devices due to differing digital rights management technologies and weak consumer demand for subscription-based services,” she said. "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. ”

The research, titled, “ Revenue Opportunities Abound In Online and Mobile Music Distribution," provides analysis of the current online and mobile music marketplaces, emerging opportunities and results from an In-Stat consumer survey.

The report highlight factors contributing to growth in digital music sales such as the global expansion of broadband, continued demand for single-track downloads and expanding music catalogs.

The potential for market growth in full-track downloads to mobile handsets in markets other than Japan is another key driver.