Online music sales up half a billion dollars a year

Despite industry claims that online music is destroying the business, revenues continue to climb by around half a billion dollars a year.

According to Gartner stats, worldwide revenues for online music sales are set to reach $6.3 billion this year, up from $5,9 billion last year.  This is set to continue to $6.8 billion in 2012, before hitting $7.7 billion in 2015.

It is a sign that industry business models are gradually taking online music fully into consideration, following a decade since Napster burst onto the scene, before much burying of heads in sand by the record labels.

Of course the days of ridiculous profits for labels are disappearing in line with overpriced CDs, with the memory of shelling out the best part of £20 on a disc fast fading.

In fact as more and more people gain access to devices on which they listen to music digitally, be it smartphones or MP3 players, CD sales are expected to continue to spiral downwards.

Apparently further drops to profits are expected, with revenues of $15 billion for CD sales to sink to $10 billion over five years from 2010 to 2015.

This means that CDs will in fact represent the majority of cash collected by labels up to the end of the decade, a long time since file downloading began to become popular.

In some areas this will presumably happen sooner than in others.  In the US the online music sector is already reaching maturity, with online growth in the double digits levelling off.  Growth is now expected to stay flat for the next few years.

This is echoed in Western Europe and Japan, with regions such as the Middle East and Latin America picking up on online music more slowly.

Further increases to revenue in all regions could also be seen in the rise of subscription based sites such as Spotify.  Although these sites offer little in the way of remuneration to artists and labels they are expected to quickly grow as a way of funding the industry.