Digital Growth Won't Stop Overall Music Sales Shrinking: Forecast

This story was written by Robert Andrews.
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. To blame - sticking points in the digital world and an acceleration in CDs' decline, their forecast revised 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).

By Robert Andrews