Table of Contents
- Scopes and Themes
- What you need to know
- Definition
- Abbreviations and terms
- Abbreviations
- Terms
- Executive Summary
- Key points
- Explosive growth since launch of iTunes leads to $1.1 billion sales in 2006
- Minority of respondents use Internet audio
- iTunes undisputed market leader with 68% of the total market
- Subscription services overpriced for most downloaders
- Consumers continue to be drawn by free downloads
- Teens, kids, young adults, Asians lead
- Reaching out to blacks and women
- Competition from MP3-phones
- Ad-based revenue and universal format sales being tested
- Listeners open-minded about ads
- Market limitations
- Music, PC playback most common usages for Internet audio
- Market Drivers
- Convenience of online and single-track sales create value
- Increasing broadband penetration
- Figure 1: U.S. broadband household projections, 2000-11
- Increasing comfort with Internet shopping
- Online music and portable MP3 players drive each other forward
- Figure 2: Manufacturer sales of MP3 players and online digital music
sales, 2001-06
- Figure 3: Graph: Indexed manufacturer sales of MP3 players and online
digital music sales, 2001-06
- Competition from free legal and illegal downloads
- Extent of piracy
- Efforts to eliminate piracy
- Piracy continues unabated
- Advertising could monetize more of the market
- MP3-capable handsets compete for sales
- Increased adoption to continue outpacing demographic growth
- Figure 4: Graph: Purchase of CDs and downloaded music, by age, May
2005-June 2006
- Figure 5: Graph: Downloads, CD purchases, and broadband access, by
household income,
- Market Size and Trends
- Figure 6: Total U.S. online retail sales of digital music, at current
and constant prices, 2003-06
- Market Segmentation
- Introduction
- Figure 7: Online retail sales of digital music, segmented by service
type, 2004 and 2006
- Figure 8: Graph: Online retail sales of digital music, segmented by
service type, 2006
- Figure 9: Graph: Indexed U.S. online retail sales of digital music,
segmented by service type, 2003-06
- Download services
- Figure 10: Online retail sales of digital music downloads, at current
and constant prices, 2003-06
- Subscription services
- Figure 11: Online retail sales of digital music subscriptions, at
current and constant prices, 2001-06
- Retail Distribution
- Introduction
- Figure 12: U.S. online retail sales of music, by vendor, 2004 and 2006
- Company profiles
- Figure 13: Timetable of entrants into the online music market, 2003-06
- iTunes (Apple)
- Rhapsody (RealNetworks)
- Napster (Roxio)
- eMusic
- Wal-Mart
- Yahoo! Music Unlimited
- Connect (Sony)
- Recently launched services (2006)
- AOL MusicNow
- Urge (Viacom)
- Zune (Microsoft)
- Advertising and Promotion
- Introduction
- iTunes
- Rhapsody
- Napster
- Zune
- Yahoo! Music Unlimited
- The Consumer
- Introduction
- Summary
- Downloads and Internet radio
- Figure 14: Usage of music downloads and internet radio, by gender, May
2005-June 2006
- Figure 15: Usage of music downloads and internet radio, by age, May
2005-June 2006
- Figure 16: Usage of music downloads and internet radio, by household
income, May 2005-June 2006
- Use of digital music services
- Figure 17: Usage of online music services, by age, October 2006
- Figure 18: Graph: Usage of online music services, by age, October 2006
- Figure 19: Usage of online music services, by household income, October
2006
- Figure 20: Usage of online music services, by presence of children in
the household, October 2006
- Reasons for not using digital music
- Figure 21: Reasons for not using digital music, by gender, October 2006
- Figure 22: Reasons for not using digital music, by age, October 2006
- Types of content listened to
- Figure 23: Types of content listened to, by gender, October 2006
- Figure 24: Types of content listened to, by age, October 2006
- Attitudes toward online music
- Figure 25: Attitudes toward online music, by gender, October 2006
- Figure 26: Attitudes toward online music, by age, October 2006
- Figure 27: Attitudes toward online music, by household income, October
2006
- How digital music is played
- Figure 28: How digital music is played, by gender, October 2006
- Figure 29: How digital music is played, by age, October 2006
- Figure 30: How digital music is played, by presence of children in the
household, October 2006
- Rates of usage
- Figure 31: Rates of digital music usage, by gender, October 2006
- Figure 32: Rates of digital music usage, by age, October 2006
- Figure 33: Rates of digital music usage, by household income, October
2006
- Race/ethnicity
- Figure 34: Usage of music downloads and internet radio, by
race/ethnicity, May 2005-June 2006
- Figure 35: Usage of online music services, by race/ethnicity, October
2006
- Figure 36: Reasons for not using digital music, by race/ethnicity,
October 2006
- Figure 37: Attitudes toward online music, by race/ethnicity, October 2006
- Figure 38: How digital music is played, by race/ethnicity, October 2006
- Teens
- Figure 39: Usage of music downloads and internet radio, by
race/ethnicity, May 2005-June 2006
- Figure 40: Teen usage of online music services, by age, October 2006
- Figure 41: Teen usage of online music services, by gender, October 2006
- Figure 42: Types of content listened to by teens, by age, October 2006
- Figure 43: Teen attitudes toward online music, by age, October 2006
- Figure 44: How digital music is played by teens, October 2006
- Figure 45: Rates of digital music usage, median for teens compared to
adults, October 2006
- Kids
- Figure 46: Usage of music downloads and internet radio by kids, May
2005-June 2006
- Future and Forecast
- Future trends
- Ad-based revenue
- Impact of MP3 cell phones
- Purchasing via high-definition and satellite radio
- Stopping piracy
- Pirates acquire new techniques
- The battle against iTunes
- Direct-to-consumer music sales
- Penetration rates to continue outpacing demographic growth
- Demographics to watch
- Kiosks to bridge the digital divide
- Capitalizing on women
- Market forecast
- Online digital music
- Figure 47: Forecast of total U.S. online retail sales of digital music,
at current and constant prices, 2006-11
- Online digital music downloads
- Figure 48: Forecast of U.S. online retail sales of digital music
downloads, at current and constant prices, 2006-11
- Online digital music subscriptions
- Figure 49: Forecast of U.S. online retail sales of digital music
subscriptions, at current and constant prices, 2006-11
- Forecast factors
- Appendix: Trade Associations
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