It's no secret the music industry is undergoing significant changes sparked by the move from physical media to online distribution. As Gartner's Mike McGuire says, "Music labels, artists, publishers and new distribution intermediaries are developing new business models to address consumers' changing behavior."
What's interesting about their analysis is it shows growth in downloads from services like iTunes slowing, while subscription services are taking off. This year, they say, susbscription services will account for just over $500 million in revenue, compared to more than $3.6 billion for downloads.
More significantly, they predict subscription revenue to grow by more than 50% next year to over $800 million, while download revenue will only increase by around 6%. By 2015 they expect subscriptions to account for more $2 billion in revenue, more than half their forecast for download services.
They outline several key challenges for content owners, including diversifying services to meet consumer demand, ensuring easy access to content through cloud services, and simplifying the process by which consumers discover new music.
Notably absent from their suggestions is any mention of increased copyright enforcement.
Written by: Rich Fiscus @ 8 Nov 2011 6:08