Digital music a long way from displacing CDs

But consumers will favour downloads over subs


It's going to be a long time before digital music downloads challenge CD sales, even in the online world. That's the conclusion of a report by market watcher Informa Media Group (IMG), published this week.

Come 2010, IMG says, global online music sales will exceed $6bn. An impressive number, but still only 15.2 per cent of total spending on music worldwide.

But still a healthy sum to share among the likes of Apple's iTunes, Napster, Virgin Digital, Wal-Mart, Tesco and co., surely? Well, not quite. That figure represents not only sales of digital downloads and subscription revenue, but CDs purchased from Amazon and co.

Digital downloads will account for half of the total - $3.1bn.

That amounts to 7.7 per cent of total music sales, leaving CD, DVD and their successor physical formats taking 92.3 per cent of the market.

Those figures look to a market five years off. Closer to today - next year, in fact - sales of digital downloads will total $422.7m, more than double the $179.5m that will be spent this year, IMG reckons. Subscription revenue in 2004 will total $103.7m, the researcher estimates, rising to $191.7m next year. For the two methods of delivery, those figures represent growth of 135.5 per cent and 84.9 per cent, so clearly IMG believes that punters will increasingly prefer one-off downloads over tethered subscription packages.

Over time, it says, downloads will prevail but the difference between the two will narrow. By 2010, download sales will total $1.98bn, subscriptions $1.12bn.

Crucially, there's room there for all of today's services to play. Apple's share will undoubtedly slide from its current strength, both in terms of online music services and music player hardware, but it's clear there's money to be made servicing iPod customers' digital music needs.

In that sense, the subscriptions versus a la carte downloads battle - or the format war, for that matter - doesn't matter. As long as Apple can continue adding content and continues to sell iPods, its customers will have access to a good back catalogue. As long as that's the case - and Apple doesn't introduce prejudicial pricing, of course - it doesn't matter very much that they can't buy songs from Napster, say. That's more of an issue for Napster and co., where there is direct competition.

IMG concurs: "Although Apple has been criticised for not opening up the iPod to accept other formats or sell downloads in a secure format other than AAC, iPod users are likely to buy downloads from the iTunes music store and so incompatibility is not a problem," its Music on the Internet report says.

"Leading download sites sell tracks for the same price and as such, consumers are unlikely to shop around for a better deal," it adds.

Apple shares this week reached a four-year high on the back of investment bank Piper Jaffray forecasts that iPod sales are starting to pull computer buyers from the Wintel world over to the Mac.

Meanwhile, Fulcrum Global Partners analyst Robert Cihra predicted iPod shipments will double sequentially to 4m units during the December quarter. ®

Related stories

Music giants feed the Wurld
Napster nips into newsagents
Apple shares hit four-year high
Digital music download coin-op to offer 'all formats, all DRMs'
EMI looks to digital as download sales quadruple


Other stories you might like

  • Will this be one of the world's first RISC-V laptops?
    A sneak peek at a notebook that could be revealed this year

    Pic As Apple and Qualcomm push for more Arm adoption in the notebook space, we have come across a photo of what could become one of the world's first laptops to use the open-source RISC-V instruction set architecture.

    In an interview with The Register, Calista Redmond, CEO of RISC-V International, signaled we will see a RISC-V laptop revealed sometime this year as the ISA's governing body works to garner more financial and development support from large companies.

    It turns out Philipp Tomsich, chair of RISC-V International's software committee, dangled a photo of what could likely be the laptop in question earlier this month in front of RISC-V Week attendees in Paris.

    Continue reading
  • Did ID.me hoodwink Americans with IRS facial-recognition tech, senators ask
    Biz tells us: Won't someone please think of the ... fraud we've stopped

    Democrat senators want the FTC to investigate "evidence of deceptive statements" made by ID.me regarding the facial-recognition technology it controversially built for Uncle Sam.

    ID.me made headlines this year when the IRS said US taxpayers would have to enroll in the startup's facial-recognition system to access their tax records in the future. After a public backlash, the IRS reconsidered its plans, and said taxpayers could choose non-biometric methods to verify their identity with the agency online.

    Just before the IRS controversy, ID.me said it uses one-to-one face comparisons. "Our one-to-one face match is comparable to taking a selfie to unlock a smartphone. ID.me does not use one-to-many facial recognition, which is more complex and problematic. Further, privacy is core to our mission and we do not sell the personal information of our users," it said in January.

    Continue reading
  • Meet Wizard Spider, the multimillion-dollar gang behind Conti, Ryuk malware
    Russia-linked crime-as-a-service crew is rich, professional – and investing in R&D

    Analysis Wizard Spider, the Russia-linked crew behind high-profile malware Conti, Ryuk and Trickbot, has grown over the past five years into a multimillion-dollar organization that has built a corporate-like operating model, a year-long study has found.

    In a technical report this week, the folks at Prodaft, which has been tracking the cybercrime gang since 2021, outlined its own findings on Wizard Spider, supplemented by info that leaked about the Conti operation in February after the crooks publicly sided with Russia during the illegal invasion of Ukraine.

    What Prodaft found was a gang sitting on assets worth hundreds of millions of dollars funneled from multiple sophisticated malware variants. Wizard Spider, we're told, runs as a business with a complex network of subgroups and teams that target specific types of software, and has associations with other well-known miscreants, including those behind REvil and Qbot (also known as Qakbot or Pinkslipbot).

    Continue reading

Biting the hand that feeds IT © 1998–2022