Spending On Digital Media To Reach $7.8 Billion
Online user-generated video content was huge in 2006. 2007 has the potential to be a good year for the TV and movie industries as they enter the digital arena and hope for the success that the music business has been able to achieve with paid content.
US consumer spending on digital music, movies and TV was 1.3 billion in 2005. eMarketer is projecting spending on all things digital to soar to $7.8 billion in 2010. In 2006 alone spending on digital services reached $2.3 billion.
“In 2006, iTunes successfully expanded its product line to include TV and movie downloads, and with Amazon and AOL opening their own digital download stores, the paid content market is set to rapidly grow,” says Ben Macklin, eMarketer senior analyst and the author the new Digital Downloading: Music, Movies and TV report.
On top of the billions that consumers will shell out over the coming years on digital music, TV and movies, media advertising will also see increased growth over the next three years.
“As online music services such as iTunes have penetrated markets outside the US, digital music sales have increased rapidly,” says Macklin.
Recent data from the International Federation of the Phonographic Industry shows 11 percent of recorded music sales in mid-2006 were digital downloads. This is a 5.5 percent increase over 2005.
The most popular media purchased online is digital music according to data from iCrossing. Ringtones were the second most popular online digital purchase. Buying movies online proved to be more popular than purchasing online TV shows.
“The iTunes model has worked for music, but can it work for movies?” asks Mr. Macklin. “Amazon, GUBA, Movielink, Movieflix, CinemaNow, AOL and others are all hoping that it can, and 2007 is likely to be the year when we see if it does”