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Digital Music Revenue To Reach $5 Billion

Record Label's Role Will Shrink

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At the end of 2007 digital music revenue in the U.S. grew to $1.98 billion and will reach $5.34 billion by 2012, according to a new report from the Yankee Group, "US Digital Music Forecast: What Fate Awaits Record Labels?"


YankeeGroup

"No industry has felt the impact of the anywhere consumer more strongly than the recording industry," said Michael Goodman, director of digital entertainment at Yankee Group.

"It’s not just that the record labels are facing declining revenue; rather, the basic relationship between recording artists, record labels and consumers is in major flux. As bands retain ownership of their music, the record label’s role shrinks while the role of technology vendors and online music stores grow."

The Yankee Group predicts that in the U.S. online music will grow faster than mobile music downloads and online single downloads will outpace album downloads or subscriptions. Despite mobile carriers efforts, online distribution will continue to dominate the category, making up 80 percent of the industry revenue. The market for music phones will grow to more than 266 million, only 9 percent of mobile users will actively use them as portable music players the firm says.

 

Digital Music Revenue To Reach $5 Billion
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