Digital Music Sales Grow While Overall Industry Declines

Revenues from digital channels expected to hit $11.6 billion in 2016

There’s no way around it—the music industry faces a serious challenge in maintaining revenues in the digital era. Audiences are consuming music through new channels that are still in the process of being monetized, such as online radio, and piracy remains a steady threat to the bottom lines of music companies across the globe. How about Tinder for 3 minute pop ditties but you

Estimates from research firm IBIS World, as cited by Siemer & Associates, project that worldwide revenues for music will fall from $27.6 billion this year to $26.3 billion by 2017.

Physical media sales continue to make up the largest chunk of revenues across the board in the countries monitored by IBIS World. However, IBIS expects digital sales to surpass those of physical media by 2017 due in part to increased internet access on mobile devices in emerging markets, along with technological gains in mature, developed markets.

IBIS also reports that worldwide, music revenues from digital media totaled $7.3 billion in 2012, and that the category would see a compound annual growth rate (CAGR) of 12.1% between then and 2016. By that year, digital revenues will total $11.6 billion. Despite this gain, digital revenues will not be able to offset the overall loss of revenues in the music industry.

Digital music revenues, however, will continue to account for a growing piece of the market share worldwide. While digital music accounted for 21% of revenues in 2008, it grew to represent 39% of the market by 2012. IBIS projects that trend will continue sharply, with digital revenues representing 80% of music revenues worldwide by 2015.

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