iTunes to sell 28% of all Music by 2012

iTunes to Sell 28% of all Music by 2012

Written on May 2, 2008 Wood Da Business, Digital Distribution, iTunes

We’ve discussed iTunes many times on the site. Its clear that digital distribution is the future of the music industry and the sooner West Coast artists embrace it the better. A new study out says that by 2012, iTunes will sell 28% of all music worldwide. Think about that for a second: 1 out of every 4 songs sold will be sold through iTunes.

I’ve posted up some important snippets of the study below, but be sure to read the whole thing. One interesting note, is analysts think that Apple will begin working with content creators to distribute their product skipping over the traditional distribution channels. Exciting times we live in!

Since its debut five years ago Monday, Apple’s iTunes Store has sold more than 4 billion songs and accounts for approximately 70 percent of digital music sold worldwide. In the next five years, it may well account for a staggering 28 percent of all music sold worldwide.

By 2012, digital music is projected to account for 40 percent of music sold, according to InStat. If Apple holds onto its current market share, it will account for more than one-quarter of all music sales by its ninth birthday. Not bad for freeware…

Digital Music News recently found that iTunes is installed on nearly 30 percent of all computers worldwide, making it the most widely installed music store application in the world…

If Apple tires of butting heads with the labels, it could eventually cut them out of at least part of the equation by forming its own record label to keep a portion of the estimated 65 cents it currently pays out to the labels for each song sold.
“Digital distribution makes the economics of the industry so different,” Kevorkian said. “That, coupled with Apple’s tremendous brand name and reputation as an online music distributor, could make it a very important point of departure.”

All it would take, she said, is the addition of an A&R department for scouting bands.

Dan Frakes, senior editor of MacWorld, agrees: “I think Apple will eventually work directly with the creators of content, allowing iTunes to sell original content without having to go through the entertainment industry.”

Only Steve Jobs knows which of these paths Apple will take, but in general, iTunes’ prospects for the next five years looks about as bright as they have been for the last five.

“If Apple keeps doing what it’s doing,” Resnikoff said, “I don’t think you’ll see any factors really eroding iTunes’ installation percentage. It’s an application that works so well.”