Consumer Adoption of New Channels Driving Online Music and Video Growth

New distribution channels for online music and video are beginning to have a significant impact on the music and video industries, reports In-Stat (http://www.in-stat.com). Online sales of digital music represented 6% of the total worldwide music market in 2006, up from 4% in 2005, the high-tech market research firm says. By 2011, online sales of digital music will represent 26% of all music purchased worldwide.

“The Internet is now an essential channel for online music distribution; and social networking sites, such as YouTube and MySpace, are beginning to show great potential as new and legitimate channels for digital content consumption,” says Stephanie Ethier, In-Stat analyst. “As a result, consumers are demanding access to digital content in more ways than ever.”

Recent research by In-Stat found the following:

-In-Stat’s latest primary research shows that 74% of respondents (primarily North Americans) downloaded music in 2006, up significantly from 48% in 2005.

-Digital piracy continues to represent the primary challenge to content owners and online service providers, particularly outside the US.

-In-Stat believes that the growth in mobile music will have important implications for the online music market.
Recent In-Stat research, Online Music and Video: New Distribution Channels Emerge (#IN0703418CM), covers the market for online music and video distribution. This report includes new primary research regarding North American consumers’ behaviors and preferences regarding both online music and video. It also provides an overview of the worldwide online music market, including forecasts for physical media bought online, download/subscription revenue, and regional segmentation. A forecast for full-length songs downloaded to mobile phones is also included in this report.