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Digital Music, 40 Percent of all Sales by 2012

Sales of digital music represented 10 percent of the total worldwide music market in 2007, up from 6 percent in 2006, according to a market study by In-Stat.

By 2012, digital music sales will represent an impressive 40 percent of all music purchased worldwide, the high-tech market research firm says.

Factors contributing to this growth include the global expansion of broadband, continued demand for single-track downloads, and expanding music catalogs. Another key driver is the potential for market growth in full-track downloads to mobile handsets in markets other than Japan, which currently is the primary market for this type of digital music format.

"Digital piracy continues to represent the primary challenge to online music service providers," says Stephanie Ethier, In-Stat analyst.

"Other obstacles still include the lack of interoperability between services and devices due to differing digital rights management (DRM) technologies, and weak consumer demand for subscription-based services. Another potential market inhibitor is the fact that content owners, cellular service providers and handset manufacturers are increasing the amount of marketing and promotion for mobile music."

The research covers the worldwide market for online and mobile music distribution. It provides analysis of the current online and mobile music marketplaces, emerging opportunities, and results from an In-Stat consumer survey. It includes forecasts for digital distribution sales by region, physical media bought online, and total music sales through 2012.

In-Stat's market study found the following:

- Sales for online digital music reached $3.05 billion in 2007, up 48 percent from 2006.

- Revenue for worldwide full track mobile downloads will reach approximately $4.2 billion by 2012.

- The majority of respondents who accessed online video (72.3 percent) in 2007 did not pay for the video they saw from the Internet.

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