New Research Sharply Questions Digital Music 'Penetration Rates'!

New Research Sharply Questions Digital Music ‘Penetration Rates’!

This raises even more questions about digital growth, and calls nearly every bullish research report on music into question. It's a very different digital/physical revenue breakdown for some of the largest worldwide markets, compiled by market research firm IBISWorld.


The findings sharply disagree with data published by industry trade groups like the IFPI, which report majority digital revenues in countries like the US.  Instead, IBIS doesn't see digital overtaking physical worldwide until 2017, within a far smaller industry.  "Many of the industry's largest companies have failed to leverage a crop of potential new revenue streams to properly compensate for the extreme drop in physical album sales over the past five years," the group flatly assessed.


 So it appears physical product is dominant in most countries, while in the US it is less so. Perhaps the biggest market for digital is the US? Perhaps more labels should explore physical product?

This is why the new music industry is smaller than the old music industry.  And why it may always be smaller than the old, physically-dominated industry of yester-decade.  Because even when you stack up every digital sale, ever, in all of history, it still pales in comparison to CD sales.  The markups on physical are just that much better.

Here's a breakdown using US-based revenue stats from the RIAA, which first started counting digital sales in 2004.  The US market has been, and remains, a strong digital music adopter.

Juno Records latest campaign