March 15, 2006, 12:00 AM

Online music sales to surpass $10 billion in 2010, In-Stat reports

Online music sales will grow 7-fold worldwide by 2010, rising to $10.7 billion from $1.5 billion in 2005, market researchers In-Stat reported today.

 

Online music sales will grow 7-fold worldwide by 2010, rising to $10.7 billion from $1.5 billion in 2005, market researchers In-Stat reported today.

In the report, "The Online Music Market: Downloaded Music Outpaces Physical Media Bought Online in 2007," In-Stat also predicts that sales of downloaded online music will outgrow sales of physical music products by 2007.

In-Stat notes that the growth rate reflects the rise in recent years of legitimate Internet-based sellers of digital music as well as the emergence of the cell phone as a new channel for music sales.

"Consumers are clearly opting for legal ways to purchase music, and more legitimate music sites are available," said Stephanie Guza, In-Stat analyst. "But vendors still face significant obstacles including Internet piracy, interoperability concerns and the unlicensed use of digital streams."

The report also found:
-- Nearly half of the survey respondents admitted to downloading music from the Internet, and 64% of these respondents have paid for the music.
-- The largest percentage of respondents who have purchased music online spent between $10 and $20 in the last 12 months.
-- The most popular site used was iTunes, with 53% of music purchasers having used the site.

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