Net music sales to hit $4 billion by 2004
Music sold through the Internet will account for 8 percent of the $47 billion worth of music expected to be sold in 2004, according to a report.
Internet-related sales will increase to $4 billion in 2004 from $46 million in 1997, which was 0.1 percent of the total music sold then, according to London-based Market Tracking International (MTI). The U.S. will account for 60 percent of online sales by 2004, with one in ten Internet sales done by downloading music in digital format from the Internet.
Artists such as Alanis Morissette and rappers the Beastie Boys and Public Enemy have endorsed the use of technologies such as MP3 (MPEG 1, Audio Layer 3) to download music from the Internet. An estimated 3 million CD-quality tracks are downloaded each day, most of them for free, causing music companies to team up and protect their copyrights and royalties.
"This is the biggest change in the music industry this century," said Simon Dyson, a music market analyst at MTI. "Technology companies are now coming to the rescue of music companies to save them from the onslaught of piracy."
Seagram's Universal Music Group and Bertelsmann's BMG Entertainment unit tied up with AT&T and Matsushita Electric Industrial today to develop a system for music over the Internet. Earlier this month, Sony joined forces with Microsoft.
Record companies, through the Secure Digital Music Initiative, plan to meet next March to establish a worldwide standard for downloading music. "By that time, there might already be four or five delivery technologies in place" Dyson said.
Europe will account for 20 percent of online sales by 2004, while Asia will take 15 percent of the market share, according to the MTI report.
The growth in online music sales has prompted online retailers such as Amazon.com to include CDs and tapes among their products.
MP3 is the second most searched for word on the Internet.
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