Digital Growth Won’t Stop Overall Music Sales From Shrinking, According To Forecast


US digital music sales will grow by 17 percent per year on average over the next five years, to make up 41 percent of sales by 2013, Forrester’s latest Jupiterresearch forecast says. But that won’t stop overall sales shrinking by 0.8 percent per year on average from $10.2 billion to $9.8 billion. Citing sticking points in the digital world and an acceleration in CDs’ decline, Forrester revised its forecast from a 7.1 percent annual drop to 8.7 percent following poor 2007 CD sales. Other projections…

Phones trump media players: The number of MP3-capable phones will grow from today’s 53 million to 240 million, or 75 percent of the US, by 2013, significantly hitting demand for unconnected media devices, which will plateau at 41 percent of the population.
Subscriptions stutter: So much for the great white hope. While the number of digital music consumers is forecast to grow from this year’s 58.7 million to 174.1 million or $3.5 billion by 2013 (55 percent of US online users), those taking music subscriptions will creep from just 2.7 million to 4.8 million.
Casual spenders: Per-user music spend is expected to shrink as more consumers will be phone users, reckoned to be only casual spenders.
DRM-free, so what?: Only 24 percent of music buyers said DRM-free would entice them to buy more digital tracks (though it’s possible some are merely unaware what DRM even is).



> Once the iPod becomes compatible with subscriptions, the debate will be over

How is to say this will ever happen? Apple are unlikely to make the ipod compatable with any other service. So if they don't do it then it won't happen.

J Dunitz

Subscription services have under-performed because the iPod, the most used portable device, does not support them. Once the iPod becomes compatible with subscriptions, the debate will be over: the dominant music revenue stream will be subscription services – and it will be substantial. Hence, the Jupiter projection in this regard will be discredited.

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