Admittedly, digital music is the wave of the future. In the ongoing CES 2008, research firm Yankee Group projects that revenues generated from online and mobile downloads in the U.S. will grow from $1.98 billion in 2007 to $5.34 billion in 2012.
Digitization and direct-to-consumer transactions are the two major growth drivers propelling this industry. Still, its impressive performance is not enough to make up for the losses triggered by the waning CD sales. Unfortunately, the rise of digital music will spell the death of the record label.
Michael Goodman, director of digital entertainment at Yankee Group, also predicts the changing relationships in this industry.
“It’s not just that the record labels are facing declining revenue; rather, the basic relationship between recording artists, record labels and consumers is in major flux. As bands retain ownership of their music, the record label’s role shrinks while the role of technology vendors and online music stores grow.”
Even though mobile music downloads get so much buzz lately, online music will still represent the biggest share (80%) in the US digital music revenue.
Read [Press Release]