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November 17, 2011

Online Music To Grow 22% To $7.7billion in 2015


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In the past 10 years, CD sales, the largest revenue stream for the industry, have eroded, while the online music revenue share is rapidly increasing. Digital downloads and streaming music services — referred to as subscription services are the clear drivers in the online music industry for the coming years.



Online Music End-User Spending by Type of Service, Worldwide, 2008-2015 (Millions of Dollars)


2011
2012
2015
Subscription Services
532.1
808.9
2,218.4
Download Services
3,629.8
3,847.4
4,050.3
Personalization Services
2,172.8
2,141.2
1,460.9
Total
6,334.7
6,797.6
7,729.6


Source: Gartner (October 2011)
Gartner estimates that subscription services will account for nearly one-third (29 percent) of end-user online music spending in 2015 (see Table 1).Source: Gartner (October 2011)

The Worldwide online music revenue from end-user spending is on pace to total $6.3 billion in 2011, up from $5.9 billion in 2010, according to Gartner, Inc. Online music revenue is forecast to reach $6.8 billion in 2012, and grow to $7.7 billion in 2015. By comparison, consumer spending on physical music (CDs and LPs) is expected to slide from approximately $15 billion in 2010 to about $10 billion in 2015.

The music industry was the first media sector to feel the full impact of two  the changing technology landscape with increasing penetration of Smart devices  and gadgets.The Internet has played a huge  role in Music Distribution  and  — the Internet and technology-empowered consumers  are creating borderless global ecosystems that defy the industry's previous notions of control and monetization. Garter expects  that the next four to five years  will  see online Music Distribution grow in a big way.