The UK digital music market reached a landmark this week: it hit the 150th million download. It’s an undoubtedly impressive metric, but in a broader context the number is not quite so encouraging. Digital music revenues are coming up against wall. We’re putting the finishing touches on our European Digital Music forecasts and it is becoming rapidly apparent that in the UK and the rest of Europe that 2007 digital revenue growth is slowing. Which is particularly concerning for a market supposedly in its early stages of development. What makes this worse is that the backdrop is 2007 shaping up to be the worst ever year for the European music industry in terms of total sales.
Digital music was meant to compete against free, offset declining CD sales and spur a format replacement cycle. So far it has failed in all three of those tasks.
A radical rethink is needed for digital music. Jupiter will soon be publishing a report which will detail some alternative strategic options. Watch this space for more details.