US digital music sales will lift to $US3.4 billion this year, exceeding the $US3.38 billion in revenue from CDs and vinyl, Boston-based Strategy Analytics said. Globally, digital music will surpass physical purchases in 2015.
Record companies are licensing artists’ catalogues to streaming services as CD purchases shrink. Sales of digital tracks and albums will rise 6.7 per cent this year, while streaming revenue will climb 28 per cent, Strategy Analytics predicted. Together they account for 41 per cent of US music sales, compared with 22 per cent worldwide.
“Streaming music services such as Spotify and Pandora will be the key growth drivers over the next five years as usage and spending grow rapidly,” Ed Barton, director of digital media at Strategy Analytics, said. “The industry will be hoping that digital can rebuild the US music market to something approaching its former stature.”
The share price of Pandora, based in Oakland, California, gained 4.4 per cent to $US9.71 in New York. The company, which only serves US listeners, has declined 3 per cent this year. Spotify, the closely held London-based service, streams music in 15 countries, including the US since July 2011.
US sales of CDs and vinyl will decline 9 per cent in 2012, a slower rate of decline than the rest of the world. Total US recorded music spending this year will rise $US134 million, or 2.1 per cent, to about $US6.38 billion, according to the researcher.
Vivendi SA’s Universal Music Group, the world’s biggest record company, is seeking European regulatory approval for its proposed $US1.9 billion acquisition of EMI Group’s recorded music business from Citigroup. A Sony-led investor group purchased EMI’s music publishing in April for $US2.2 billion.
Sony Music is the second-biggest record company, followed by billionaire Len Blavatnik’s Warner Music Group.
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