US digital music sales will more than double this year, analysts claim.
JupiterResearch announced its new projections yesterday at the Jupiter Plug.IN Conference and Expo 2004. It anticipates that sales will reach more than $270 million in 2004, and will grow to reach $1.7 billion in 2009, the report claims. This equals 12 per cent of consumer music spending. Previous expectations from the company had anticipated 2009 sales of $3.3 billion.
"While digital music will return the US music industry to growth after four years of deeply-declining sales, digital music will not replace CDs or bring music sales back to its 1999 peak," the analysts said.
Music as a commodity?
Jupiter also anticipates future success for subscription-based digital music services. Senior analyst and vice president David Card said: "The so-called celestial jukebox is in sight," but warned, "for now, it will appeal to music aficionados.
"The US music industry must manage digital music as one of a series of incremental revenue streams, one that is in the same scale as licensing, for example, ring-tones, games and advertising," he advised.
Is small beautiful?
The analysts also predict that MP3 player shipments will grow over 50 per cent in 2004, exceeding 5 million units. Shipments are anticipated to grow almost 50 per cent per year for the next several years.
In a move that may cast a cloud on Apple's strategy for the market as seen so far, JupterResearch vice president and research director Michael Gartenberg said: "A lot of the action in hard-drive-based devices will be at the low end in terms of price and capacity".
Gartenberg added: "JupiterResearch surveys show that 77 per cent of consumers who would purchase a portable music player would want no more than 1,000 songs on a player at any given time, regardless of the size of their music collection".