Blog Post

Digital Music Sales To Offset Physical Decline By 2010?

European digital music sales will finally make up for CDs’ shortfall in 2010, according to Jupiter Research’s latest forecast.

Losses: While digital revenues grew 63 percent to a record 401.2 million euros in 2007, that’s just five percent of the overall market, which Jupiter reports lost a record 10 percent in 2007. Digital sales equalled just 13 percent of the money physical formats lost. Overall music sales have now been shrinking since 2003. Spain has been hit particularly hard, losing 37 percent of its market in that period thanks to a prevalence of illegal P2P (35 percent of users) that’s above the European average (18 percent).

EU/US/UK: Jupiter reckons only eight percent of online Europeans buy music on the net compared to 15 percent in the US. While digital makes up five percent of EU sales, it’s 13 percent in the US. But the UK will lead Europe, contributing 44 percent of all digital music revenue. In Europe, some 285 online stores are chasing 1.4 million euro annual revenues, but are getting far less thanks to iTunes Store’s dominance.

Projection: A fifth of online Europeans will buy their music online by 2012, Jupiter reckons, making a quarter of all music sold digital.