Jupiter has just released its latest European digital music forecasts. The key finding is that although European spending will total €2 billion by 2012 revenues will not fully Compensate for Declining CD Sales Until 2010, and even then mobile digital revenues will be partially responsible for the turn around. The cold reality is that 2007 was a record year of revenue decline for the overall European music market and that although digital revenues experienced a record high of €401.2 million they represented just 13 percent of the drop in CD sales. In short digital is currently failing in three of its key objectives:
• competing with free
• offsetting declining CD sales
• generating a format replacement cycle
However the positive news is that the music industry is already putting strategies in places to address the situation. iTunes is not the be all and end all of digital music. Less than 10 percent of European Internet users currently buy online. This is why the labels are beginning to pursue more adventurous (and risky) licensing strategies with initiatives such as Nokia’s ‘Comes With Music’ with Universal Music. This brave new approach by the major labels will help free digital music from its chains and will be as important to the future of digital music as the longer term drivers, such as MP3 player adoption and consumer awareness.
So digital music isn’t doing enough yet to save the music industry, but it will begin to do so over the coming years.
If you are a journalist and would like to get more information about this report then please email PRESSEUROPE AT JUPITERRESEARCH DOT COM
If you are a client you can see the report here: “European PC Digital Music Forecast, 2007 to 2012”