According to technology research firm Gartner (News - Alert), global online music revenues are expected to increase by about seven percent this year to $6.3 billion.
Sales of CDs will continue to decline faster than the music industry can adapt to, and as digital services such as Spotify (News - Alert) and iTunes continue to gain popularity, consumer spending on physical music forms is expected to fall to about $10 billion in 2015 from $15 billion in 2010.
By 2015, Gartner forecasts online music spending will rise to $7.7 billion from $5.9 billion in 2010.
“The music industry was the first media sector to feel the full impact of two major forces – the Internet and technology-empowered consumers,” Gartner analyst Mark McGuire said in a report.
“It has staggered through the first decade of the 21st century and entered the second bedraggled financially and facing a powerful set of intermediaries, which are creating borderless global ecosystems that defy the industry’s previous notions of control and monetization,” he wrote.
Popular online music services include subscription services, like Pandora (News - Alert), Spotify and Lastfm.com. Gartner expects subscription services to be worth $2.2 billion by 2015, accounting for 29 percent of all online music spending by consumers.
Legal purchasing of online music has benefitted the music industry. Stores like iTunes has increasingly encouraged consumers to pay for music, and it has allowed big music labels to raise more money from live concerts by sending many stars who had given up on touring back on the road.
Apple (News - Alert) recently celebrated the iPod’s 10th birthday. The iPod was initially met by snickers and boos from critics and consumers alike, who felt the $299 handheld device was too expensive and too late on the scene. The introduction of the Windows-compatible iPod in 2002 and the launch of the iTunes Music Store a year later brought the iPod to mainstream audiences and helped start its reign as the MP3 king.
Rachel Ramsey is a TMCnet editorial assistant, contributing news items and feature articles on a variety of communications and technology topics. Rachel has previously worked in PR and communications at The Wriglesworth Consultancy, an award-winning London PR firm. She has also contributed to the creative services department at CBS 3 and The CW Philly in Philadelphia. To read more of Rachel's articles, please visit her columnist page.
Edited by Jennifer Russell