Emerging Industry Overview: E-Commerce: Online Music and Film Distribution

Industry Snapshot

Consumers love their music. NPD research indicated that total music consumption in the United States rose one-third between 2003 and 2007, and the recorded music industry generated a greater percentage of its revenues through digital sales that the film, magazine, and newspaper industries combined. Said Casey Johnson in an August 2009 article for ArsTechnica, "If current trends hold, U.S. digital music downloads will rake in more money than physical formats next year. Worldwide, digital will overtake physical by 2016"

However, downloads were only part of the story, according to a report from the Insight Research Corp. The market for on-demand digital content--including music, video, and Internet Protocol Television (IPTV)--streamed to a user's computer or mobile device was poised for explosive growth. The revenue derived from content sales, as well as related advertising, was forecast to reach $27 billion by 2011 in the United States alone. Insight explained that these conservative estimates represented a compound annual growth rate of almost 32 percent.