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Digital music sales to grow in Australia

November 2, 2006

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Australians will spend nearly $60 million on digital music downloads in 2007, research has predicted. Business information analysts IBISWorld say digital music distribution is the key to the future success of the music industry.

They say the CD market has matured as consumers turn to digital music players such as iPods.

“This year we’ll spend about $30 million on digital downloads,” said IBISWorld’s Australian general manager Jason Baker.

“Next year this figure will almost double and by 2010, it is forecast we will be spending an incredible $200 million on our favourite downloadable tracks.”

Mr Baker said this growth was primarily driven by the introduction of iTunes and mobile ringtones.

“Over the same period, the (mobile phone) ringtone market is expected to post double-digit growth, compared to low single digit growth for the total recorded music industry,” he said.

Much of the growth in the digital download market was focused on the independent music market, adding that the take-up of technologies such as myspace.com provided an avenue for unsigned and amateur artists.

A growth area yet to take off in Australia was that of satellite CDs, where consumers compile their own CDs by downloading songs from a central database beamed into a music store via satellite. IBISWorld expects that technology to arrive in Australia by 2010.

Mr Baker considers the local music industry needs to embrace new technologies. “Record executives will be celebrating an anticipated spike in sales from ARIA-winning artists,” he said.

“But for long-term sales success they will need to continue to plough funds into the development of new distribution systems for digital music files, such as mobile phone ringtones, internet downloads and other forms of digitally distributed music – and marketing them to their largest prospective market – the under-30s,” he said.

Universal Music Australia seems to agree that mobile content is a growing market since it has now finalized a deal with MobileActive Limited, a Sydney-based wireless content and entertainment firm.

The relationship will focus on off-deck distribution, and position a broad range of artists across web and WAP-based destinations. Assets like master ringtones, video ringers, and wallpapers will be available from a total 50,000 artists, including Powderfinger, Nelly Furtado, Mariah Carey, Pussycat Dolls, Black Eyed Peas, Bon Jovi, Sting, Wolfmother and catalog artists like Jimi Hendrix and ABBA.

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