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Music labels still expect to see sales drop by $5 billion

With traditional music sales of CDs plummeting, music labels are looking for alternate revenue streams. While record labels see higher profit margins from physical media sales like CDs, the huge volume of sales that digital downloads can deliver may offset the lower profit margins.

According to a new study from research firm eMarketer, traditional music sales will continue to decline, but online and mobile music sales will grow rapidly. As faster mobile networks are introduced around the country, digital music downloads will become faster and easier for users to purchase.

The report predicts that by 2011, mobile music sales will be a $7.3 billion business. In 2007, mobile music sales amounted to $1.7 billion and by the end of the year sales are predicted to total about $3 billion. In 2009 the number is expected to hit $4.8 billion and by 2010 the mobile music industry will be worth $6.2 billion.

Despite the huge growth to be seen in the mobile music market, Information Week reports that the music industry expects to see a decline in music sales of about $5 billion. The report includes master recording ring tones, full-track audio downloads, ringback tones, music video downloads and streaming services in the predicted market worth.

There are many mobile services looking to cash in on the massive growth expected for mobile music downloads. Apple’s iTunes music download service is currently the top digital music retailer and Apple has said it plans to enter the mobile music market with ring tones and more.



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Profit Margins
By enlil242 on 7/7/2008 3:42:49 PM , Rating: 2
quote:
While record labels see higher profit margins from physical media sales like CDs


When CDs came out, the promise was that the price of music was supposed to fall once I adopted the CD format ... But instead they went up for "higher profit margins."

I am a musician, with a job that pays well. I respect that artists should be able to make a living, but somewhere, the whole thing got skewed.

I like the fact that artists have a new medium to produce their work outside of record companies (and subsequently the RIAA), but I still think the digital medium is a double-edged sword - See Radiohead. Not too many people opted to pay for their music when they opted for the "pay what you think it's worth model..."

I just think the Recording Industry screwed up and now us, people have no sense or regard for the "value" of real art and the hard work and sacrifice that artists put into it. This, of course, doesn't include the mega rich "Metallicas" of the industry either... They're just as bad.




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