Digital Music Sales to Increase

Downloads to surpass physical sales...

Videos by American Songwriter

Videos by American Songwriter

According to a new report released by Forrester Research Inc., half of all music sold in the U.S. will be digital in 2011, and sales of digitally downloaded music will surpass physical CD sales by 2012.


According to a new report released by Forrester Research Inc., half of all music sold in the U.S. will be digital in 2011, and sales of digitally downloaded music will surpass physical CD sales by 2012.

The report, entitled “The End of Music As We Know It,” predicts digital sales to grow by 23 percent per year through 2012, at which point they will reach $4.8 billion in annual sales. According to the report, CD sales will slide to $3.8 billion by 2012, so this digital growth won’t make up for declines in sales of physical product over the next five years.

The Cambridge, Mass.-based research company surveyed 5,000 consumers in the U.S. and Canada. While it believes that digital downloads will dominate sales in the coming years, it sees some growth potential for online music subscription services, which it believes will grow to $459 million in revenues by 2012.

British consumers will spend more than £160 million ($312 million) on digital downloads this year, up by roughly 50 percent from last year, according to ERA Digital, a division of the Entertainment Retailers Association. The organization attributes some of the growth to spiked interest in full-album downloads, which are forecasted to account for £69.4 million ($135 million) in sales this year.

Both Forrester Research and ERA Digital cited video games and DVD sales as some of the star performers for physical entertainment retailers. According to Forrester VP and Principal Analyst James L. McQuivey, “The artist is the product, not just the source of it. New forms of revenue will come from unexpected sources. For example, the industry has failed to capitalize on the growing popularity of video games such as ‘Guitar Hero’ and ‘Rock Band’… a videogame market where titles can sell five million copies is enough to motivate even the most depressed music executives.”

Well, Aerosmith is ready to walk this way. A “Guitar Hero: Aerosmith” edition will be ready by this summer!

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