According to a new research report from the analyst firm Berg Insight, digital music sales will overtake physical sales in Western Europe by 2011. This year the report estimates that digital sales are going to account for 10 percent of total music retail revenues.
Rapidly increasing digital sales are expected to offset the decline in physical sales and push the European music market back into growth from 2008. The total European music retail value is expected to grow at an annual compound rate of 6.5 percent from € 8.5 billion in 2007 to € 11.6 billion by 2012.
Berg Insight anticipates the evolution of a converged digital music market spanning desktop and portable devices, where mobile handsets are going to play a significant role. “Music enabled handsets already outsell portable music devices massively”, said Hanna Hallberg, telecom analyst at Berg Insight. “We expect that the handset is going to become the primary portable listening device. Once consumers are provided with unhindered mobile Internet access, these devices will increasingly be utilised for accessing online music content.” The report supports the notion that existing DRM-schemes are dissuading consumers from using legal music downloading services and underlines the importance of the ability to get dual delivery to PC and mobile handsets.
