Study Predicts $42.8 Billion Music Market by 2005
The $42.8 billion projection is extrapolated from compounded annual growth rates varying from 2.8% in Europe to 4.8% in the US, which is expected to lead the world in music purchases. The study predicts that the US market will reach $18.4 billion in 2004, up from an estimated $15.5 billion this year. Asia will be the next-hottest growth area, with a yearly increase of $3.9%, to a total of $10.3 billion four years from now. This year's Asian music market is estimated at $8.6 billion.
Europe will show the slowest growth, according to the study, with a four-year increase from $12.5 billion in 2000 to $14.1 billion in 2004. Online piracy and high sales taxes are two strong inhibiting factors for the growth of the European market, according to the study.
Although the compact disc will continue to be the dominant format well into the future, there will be a continuing shift toward digital distribution, which is forecast to account for as much as 5% of the overall market in 2004. The study's authors predict that digital music-subscription services will become commonplace, especially in Japan. One significant change for the music industry will be a shift from album sales to singles as more people sign on for such services.
To put the numbers in perspective: A small record label that can capture only 0.01% of the world music market will enjoy annual sales of almost $5 million. Steady growth in the music market also bodes well for manufacturers and retailers of audio equipment.