Statistik – #5 // Global Digital Music Sales to cross $5 Billion barrier in 2012

By Chris "MUG5" Maguire on August 26, 2012 in Music, Statistics
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Streaming revenues up 40% compared to 8.5% for downloads. Digital share of music sales (39%) still dwarfed by physical sales (61%).

Online streaming revenues will grow at almost five times the rate of download revenues in 2012, according to Strategy Analytics’ latest Global Recorded Music* Forecast. Streaming revenues will increase 40 percent in 2012 – to £696 million – whilst download revenues will increase by 8.5 percent to £2.5 billion (see Chart 1). Therefore, streaming services will take over as the leading revenue growth engine for the music industry in 2012, generating an extra £199 million – £5 million more than downloads at £194 million.

Overall digital (including mobile)1 music spending will increase by 17.8 percent (£836 million) in 2012 to £5.5 billion compared to a 12.1 percent decline (£1.2 billion) in packaged² sales (see Chart 2).

This means that digital music will increase its share of global recorded music spending to 39 percent in 2012; however, this is still much smaller than packaged music sales which will account for 61 per cent of spending. Strategy Analytics forecast digital spending will overtake physical on a global basis in 2015; however, some countries, such as the US, Sweden and South Korea, are making the transition to digital taking the lions’ share of spending at a much faster rate.

Ed Barton, Strategy AnalyticsDirector of Digital Media, explains:

“Although downloads still account for nearly 80 per cent of online music revenues, this market is maturing and spending is flattening in all key territories. Streaming music services such as Spotify and Deezer will be the key growth drivers over the next five years as usage and spending grow rapidly.

Why? Because people are increasingly valuing accessibility and availability over actual ownership of digital music which, in turn, drives growth in streaming services which routinely offer instant access to over 10m tracks. Additionally, the emergence of cloud storage of a subscriber’s existing music library for seamless streaming to a range of connectable devices improves the value proposition further.”

UK Music Revenue

2012 UK streaming revenues will grow at over four times (41.9 percent) the rate of downloads (9.1 percent). This growth means online streaming and downloads account for a much higher share of music spending in the UK than globally (38 percent vs. 22 percent).

Conversely, UK physical sales are decreasing sharply in 2012 – well over double the global rate – with spending expected to decline by 30 per cent in 2012. Annual digital spending is forecast to overtake physical music sales in the UK in 2015.

About the Author

Chris "MUG5" MaguireView all posts by Chris "MUG5" Maguire >
I am a freelance Creative Director / Multimedia Futurist capable of producing hi-end work, to tight time-frames, both nationally and internationally, whatever the required medium (music, design, film, photography, art and writing). A hands on executive, I am as capable leading a team to success as I am being the team – taking projects from concept to completion single handedly if the need presents itself. Need a team for your project but only have the budget for one or two people? I’m the guy that can help you get a team’s worth of work on your budget.