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Report: World digital music sales to soar £250m

CD and LP sales flag, but discs beat downloads

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Global sales of digital music rose this year and are predicted to top £3.92bn ($6.3bn) by the end of December, an increase from £3.67bn ($5.9bn) in 2010, according to a report from Gartner.

But the bulk of music industry income still comes from sales of physical music (CDs and LPs) and will continue to do so past 2015 if the bean counters' forecast holds good. In 2015, global CD sales are predicted to be worth £6.22bn ($10bn) and online music about £4.79bn ($7.7bn). The rise in digital music spending (£1.12bn, $1.8bn) in 2010-15 won't fully compensate for the slide of £3.11bn ($5bn) predicted for physical sales as they slip from the £9.33bn ($15bn) worth sold in 2010.

However, with the rise in digital comes opportunity, says the report. Artists and labels need to prepare to differentiate themselves in a digital world, the analyst says.

"Online music service providers (retailers or subscription service providers) must continue to invest in compelling shopping or consumption experiences that provide search, discovery, recommendation and taste-sharing capabilities," the report recommends. "These efforts must be tightly integrated with efforts to extend service, via applications, to popular devices."

They also advise using social media to drive discovery and consumption and customer tracking to fuel recommendation engines.

Subscription services such as Spotify will drive a significant amount of digital sales, while Latin America and Asia/Pacific will see the biggest uptake of digital music, the analyst predicts.

The full report, Media IAS Online Music Forecast, 2011-2015: Social Media, Subscriptions and the Cloud, is here. ®

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