Online Music Download Sales
US$2.9 Billion from International Digital Song Downloads in 2007
Five years after legal music download services were introduced, online digital music now generates more than 15% of worldwide music sales. This percentage compares with only 2% in 2004.
John Kennedy, Chairman and CEO of record industry association IFPI, observes that music’s digital market share by revenue is now higher than in any other entertainment sector except online games including poker.
In 2007, record company revenues from digital music sales were an estimated US$2.9 billion, up by 38% from US$2.1 billion in 2006 and up 663% from US$380 million in 2004.
The number of legally downloaded music tracks was up 53% in 2007, up 53% from the prior year.
Top Ten Digital Music Sales by Country
The United States remains the leader in digital music sales worldwide, where 30% of all recorded music is sold online or in mobile formats. The top 10 countries leading the demand for digital music are shown below in order. Beside each country is shown the percentage of digital music sales, either via online or in mobile format.
- United States … 67% download digital music online, while 33% use mobile devices
- Japan … 9% (via online), 91% (mobile)
- United Kingdom … 71% (via online), 29% (mobile)
- South Korea … 63% (via online), 37% (mobile)
- Germany … 69% (via online), 31% (mobile)
- France … 39% (via online), 61% (mobile)
- Canada … 58% (via online), 42% (mobile)
- Australia … 59% (via online), 41% (mobile)
- China … 27% (via online), 73% (mobile)
- Italy … 44% (via online), 56% (mobile).
Single track downloads in the United States amounted to 844 million in 2007, up 45 per cent on 2006. Consumers in the United Kingdom bought 77.6 million tracks online in 2007, a 47% increase on 2006. In Australia, digital-only music tracks are now specified separately in the weekly sales charts.
Asian Demand for Online and Mobile Music
In Japan, mobile music now generates 90% of digital music sales. With over 100 million mobile subscribers, digital music sales are strong principally because the Japanese use mobile phones as the leading channel for entertainment and music.
South Korea was the first market where digital music sales surpassed music sales on physical media. Over 60% of the South Korean market is now digital music sales.
Handicapped by a digital music piracy rate as 99% of the market, China has seen limited growth in legitimate sales for online and mobile digital music downloads. Analysts estimate that more than 95% of Chinese music downloads are illegal.
In the rest of Asia, ringback tones continue to dominate the digital music market of many countries. Indonesia is now the third biggest market in the world for ringback tones, behind the America and Japan.
Digital Music Growth Drivers
A recent Public Opinion Strategies Survey confirms that 51% of consumers agree that that music is the most important form of entertainment, well ahead of watching television (27%) or going out to the movies (10%).
Consumers now demand to access music downloads 24 hours a day and as fast as possible. With sales of 140 million portable music players in 2007, today’s mobile listeners want to be able to hear their music wherever they go.
Consequently, the number of websites offering legal music download services has blossomed from 50 in 2003 to well over 500 download portals where consumers can shop around for songs online in 2007. More than 6 million licensed online music tracks are available, up from 1 million just 5 years ago. More than just songs can be downloaded; today a single artist release can be packaged in multiple formats include video downloads, ringtones or mobile full tracks.
Worldwide, online single track downloads are the leading digital music format driving 30% of overall digital revenues. IFPI estimates that 1.7 billion online tracks were downloaded in 2007 around the globe, up 53% from 2006.
Mobile Music Mastertone Downloads
Globally, digital music sales are divided equally between online downloads and mobile sales.
While mobile digital music sales grew more slowly than online downloads in 2007, mobile music has big growth potential as consumers around the world demand more personal handheld devices. Short excerpts from an original sound recording that play when a phone rings, mastertones are today’s most popular mobile music format.
However, during 2007 there was notable pickup in sales to mobile devices of full-track downloads, doubling the sales percentage from 2006. This trend may well mark an ongoing shift in consumer demand from mobile personalisation features, such as mastertones and images of favourite artists, to single and album music downloads over mobile phones.
Sources for this Article
This article presents independent calculations and insights based on facts and data from the International Federation of the Phonographic Industry (IFPI)’s Digital Music Report 2008.
