A new survey from Jupiter Research indicates that the digital music market will grow rapidly from about US$270 million (€221 million) in 2004 to US$1.7 billion (€1.4 billion) in 2009. At that point, digital downloads will account for 12% of consumer music spending.
These new sales are expected to end the four years of declining sales, but won’t bring the industry back to its 1999 level of activities. Nor are downloads expected to start cannibalising CD sales any time soon.
Subscription services are expected to become more popular than downloads in the long run – on this, JupiterResearch VP and Senior Analyst David Card says: “The so-called celestial jukebox is in sight. But for now, it will appeal to music aficionados. The U.S. music industry must manage digital music as one of a series of incremental revenue streams, one that is in the same scale as licensing.”
US sales of digital music players are expected to grow by more than 50% per year for the next few years. Interestingly, the survey showed that 77% of consumers who would buy a player did not feel they needed more than 1000 songs on a player at any one time, irrespective of the size of their music collection.