Wednesday, February 20, 2008

Music Sales Get Disc-located

CD music sales will be passed by online music sales by the time we're gearing up for the next presidential election, according to MediaPost.

Because online music sales are rising quickly and CD sales are slowing retracting, the two figures will intersect around 2012. The bad news for the music industry is that the total market will continue to shrink.

From a high of $14.2 billion in 2000, total revenues will shrink to just $8.6 billion in 2012, if Forrester's prediction holds.

Performers can make up some of this shortfall by touring more, but as I've said before, the music industry needs to stream tunes for free and generate more money from advertising. Online streaming services such as Last.fm today have created free channels in hopes of generating song sales, but incorporating audio and video advertisements is the best hope for expanding revenue.

The same can be said for music videos, which while not as important as before, are ripe for product placement. Put a Nissan Altima in a music video and get a six-figure check.

Posted By John Gartner at 12:37 PM
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