Forecast: Online music distribution to dwarf mobile

Despite the best efforts of mobile operators, online distribution will continue to dominate the digital music market, accounting for 80 percent of industry revenue by 2012, according to a new report released by market research firm Yankee Group. According to "U.S. Digital Music Forecast: What Fate Awaits the Record Labels?," digital revenue (online and mobile) is accelerating, growing to $1.98 billion by the end of 2007--while Yankee forecasts the digital music market will grow to $5.34 billion by 2012, the leap will remain insufficient to offset declining CD sales, although the increasing marginalization of labels guarantees a larger share of revenues will go directly to artists.

Yankee Group anticipates online music will grow faster than mobile music downloads, and online single downloads will outstrip album downloads or subscriptions--even though the addressable market for music-enabled phones will expand to 266 million by 2012, only 9 percent of mobile subscribers will actively use them as portable music players. Accordingly, Yankee recommends that carriers actively promote the PC distribution channel over the handset. 

For more on the Yankee Group report:
- read this release

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