FutureWire - futurism and emerging technology

Wednesday, January 19, 2005

Online Music Sales Rose Tenfold in 2004

Music lovers are increasingly obtaining their music online -- legally -- as sales of downloadable music soared in the US and Europe by a factor of 10 in 2004. The number of pay download sites quadrupled last year as well, and the catalogue of legally available music now stands at over one million songs.

The growth, measured by the International Federation of the Phonographic Industry (IFPI), was driven by the popularity of iPods and other MP3 players, as well as the desire of music consumers to download music a la carte rather than to buy entire albums.

The music industry finally appears to be getting the message about online music, making it easier for consumers to download tracks rather than fighting them. As a result, the industry was rewarded with its first-ever significant revenue from legally downloaded music ($330 million). Consumers, for their part, are showing their willingness to pay for downloads so long as the price is fair and the process is convenient.

The IFPI predicts that global revenues from online music sales will double in 2005. Less clear, however, is how more traditional elements of the music industry -- namely retailers of CDs -- wil be affected by this trend. Also not clear is how downloading music might change long-established business models within the industry -- something the industry in the US has fought so hard to protect -- or whether the growth in legal downloading will lead to a corresponding drop in illegal file shareing.

Source: AFP Worldwide News (Yahoo!)