Monday, November 27, 2006

Digital Music Market to reach $15 Billion by 2010

According to the latest research from iSuppli, The global market for digital recorded music, (delivered both via broadband and over mobile-phone networks,) is expected to grow by nearly six-fold during the period from 2005 to 2010.

Due to the rapid growth of these two segments, iSuppli believes the worldwide market for digital recorded music will reach $14.9 billion in revenue by 2010, expanding at a Compound Annual Growth Rate (CAGR) of 40.7 percent from $2.7 billion in 2005. Meanwhile, the market for physically distributed music, i.e. music CDs, will decline to $19.6 billion by 2010, down from $27.3 billion in 2005.

Major trends in digital music include:

--The emerging competitive battle between mobile and broadband music services.

--Mobile/cellular music's generation of new revenue streams, as well as comparatively lower piracy risk and new forms of music derivatives.

--The strong expansion of broadband music revenue in North America, and the nascent growth in Europe and Japan.

--The vertical integration of the music playback devices, software and online stores, as more competitors mimic Apple's successful iTunes/iPod model.

--The rising number of mobile music track downloads and the increasing sales of music-enabled phones as a competitive threat to broadband music and standalone MP3 players. Music-enabled phones already out-ship MP3 players by a factor of more than 2 to 1.

Of these, the most important trend in digital music is the increasing competition between broadband music distribution and mobile network music distribution.

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