SPI Infoamtion

Table of Contents

Executive summary

Digital music - the new era
Key markets
The value chain and evolving business models
Key challenges
Future outlook
Key players

Chapter 1 Introduction

What is this report about?
Methodology and definitions

Chapter 2 Digital music - a new era

Summary
Global market overview

Market size and growth
Segmentation - online and mobile music components
Digital music more popular among younger consumers

Growth drivers

Increasing penetration of broadband and mobile technologies
Soaring sales of smartphones and portable players
Expanding online catalogues and DRM-free strategy

Key trends

Innovative marketing drives the market forward
Move towards DRM-free tracks
Partnerships emerging across the value chain
Artists reaching out to fans directly
Growing involvement of local governments and ISPs in controlling piracy

Chapter 3 Key markets

Summary
Developed markets

US
Japan
UK
France
Germany

Emerging markets

China
India
Brazil

Chapter 4 The value chain and evolving business models

Summary
The virtual music value chain

Artists
Record labels / production companies
IP rights protection body
Physical retailers
Digital music retailers
Consumers

A-la-carte downloads vs. subscription services
Key emerging business models

Advertising supported services
Artist led distribution channels
Linking with brands, merchandise and mobile games
Music access services by ISPs and mobile operators
Partnerships across the value chain
Flexible pricing

Chapter 5 Key challenges

Summary
Introduction
Piracy - plague of the digital music industry

Depth of the problem
Piracy spans across geographies
Steps to curtail piracy

Role of ISPs and government support
Legal action against P2P networks
Initiatives by record companies

Interoperability issues - finding an effective DRM system
Determining the right price for digital music

Chapter 6 Future outlook

Summary
Strong growth to continue

Developed and emerging markets
The future face of music - music to go
Graduating to full-track downloads and music videos

Evolution of business models

Subscription model is the key to the future
Ad-supported services will become more popular
Labels reaching out to consumers directly
Cashing in on live music
Capitalizing on popularity of social networks
Emergence of new business models
Changes in the pricing mechanisms

Technology innovations and advances

MP3 player market to grow with innovations
Technology enabling music on the go
Convergence of multiple formats, devices and channels
Audio formats and quality

Music piracy

Music piracy most rampant among younger consumers
Collective efforts required to curtail music piracy

Chapter 7 Key players

Summary
Digital music retailers

iTunes Music Store

Overview
Service offerings
Operational and financial performance
Strategy

eMusic

Overview
Service offerings
Operational and financial performance
Strategy

Napster

Overview
Service offerings
Operational and financial performance
Strategy

Rhapsody

Overview
Service offerings
Operational and financial performance
Strategy

Amazon MP3

Overview
Service offerings
Operational and financial performance
Strategy

7digital

Overview
Service offerings
Operational and financial performance
Strategy

Wal-Mart Music Downloads

Overview
Service offerings
Operational and financial performance
Strategy

Appendix

Index

List of Figures
Figure 1.1: Key players in digital music retailing
Figure 2.2: Global digital (online and mobile) music market forecast ($bn), 2005-2013
Figure 2.3: Global digital platforms' share in overall music market (%), 2004-2008
Figure 2.4: Top ten countries' split of digital music (%), 2007
Figure 2.5: UK key music-related activities (% respondents)
Figure 2.6: UK respondents in favor of free music
Figure 2.7: Global broadband subscribers and penetration (m, %), 2004-2007
Figure 2.8: Global mobile subscribers and penetration (bn, %), 2004-2008
Figure 2.9: Global iPod sales ($bn and units), 2006-2008
Figure 3.10: US digital music market forecast ($bn), 2005-2013
Figure 3.11: US digital platforms' share in overall music market (%), 2005-2008
Figure 3.12: US digital music market breakdown ($m), 2005-2008
Figure 3.13: US digital music market breakdown (m), 2005-2008
Figure 3.14: Japanese digital music market forecast ($m), 2005-2013
Figure 3.15: Japanese digital platforms' share in overall music market (%), 2005-2008
Figure 3.16: Japanese music market share of online and mobile channels (%), 2005-2008
Figure 3.17: Japanese mobile music market breakdown ($m), 2006-2008
Figure 3.18: Japanese mobile music market breakdown (m), 2006-2008
Figure 3.19: Japanese online music market breakdown ($m), 2006-2008
Figure 3.20: Japanese online music market breakdown (m), 2006-2008
Figure 3.21: UK digital music market forecast ($m), 2005-2013
Figure 3.22: UK digital platforms' share in overall music market (%), 2006-2008
Figure 3.23: UK digital music market breakdown ($m), 2006-2008
Figure 3.24: UK digital music market breakdown (m), 2006-2008
Figure 3.25: Chinese digital music market ($bn), 2006-2010
Figure 3.26: Indian mobile music market ($bn), 2006-2010
Figure 4.27: The music industry value chain
Figure 4.28: Categories of digital music service providers
Figure 4.29: Digital music sales by channel (%), 2007
Figure 4.30: Internet advertising market size ($bn), 2007-2011
Figure 7.31: Key players in digital music retailing
Figure 7.32: iTunes revenue ($m), 2004-2008
Figure 7.33: Napster revenue ($m), 2004-2008
Figure 7.34: Rhapsody revenue ($m), 2005-2008

List of Tables
Table 2.1: Global digital (online and mobile) music market size ($bn), 2005-2013
Table 2.2: Global digital platforms' share in overall music market (%), 2004-2008
Table 2.3: Top ten countries' split of digital music (%), 2007
Table 2.4: Global broadband subscribers and penetration (m, %), 2004-2007
Table 2.5: Global mobile subscribers and penetration (bn, %), 2004-2008
Table 3.6: Broadband penetration in developed markets, 2008
Table 3.7: US digital music market forecast ($bn), 2005-2013
Table 3.8: US digital platforms' share in overall music market (%), 2005-2008
Table 3.9: US digital music market breakdown ($m), 2005-2008
Table 3.10: US digital music market breakdown (m), 2005-2008
Table 3.11: Japanese digital music market forecast ($m), 2005-2013
Table 3.12: Japanese digital platforms' share in overall music market (%), 2005-2008
Table 3.13: Japanese music market share of online and mobile channels (%), 2005-2008
Table 3.14: Japanese mobile music market breakdown ($m), 2006-2008
Table 3.15: Japanese mobile music market breakdown (m), 2006-2008
Table 3.16: Japanese online music market breakdown ($m), 2006-2008
Table 3.17: Japanese online music market breakdown (m), 2006-2008
Table 3.18: UK digital music market forecast ($m), 2005-2013
Table 3.19: UK digital platforms' share in overall music market (%), 2006-2008
Table 3.20: UK digital music market breakdown ($m), 2006-2008
Table 3.21: UK digital music market breakdown (m), 2006-2008
Table 4.22: Internet advertising market size ($bn), 2007-2011
Table 7.23: iTunes Music Store Snapshot
Table 7.24: iTunes revenue ($m), 2004-2008
Table 7.25: eMusic Snapshot
Table 7.26: Napster Snapshot
Table 7.27: Napster revenue ($m), 2004-2008
Table 7.28: Rhapsody Snapshot
Table 7.29: Rhapsody revenue ($m), 2005-2008
Table 7.30: Amazon MP3 Snapshot
Table 7.31: 7digital Snapshot
Table 7.32: Wal-Mart Music Downloads Snapshot