Summary Of The Legitimate Online Music Market

SEE ALSO

Headline Statistics

There are some 50 + online music sites in Europe and many more globally.
They offer 300,000 tracks - the equivalent of 25,000 albums.
There are 650,000 users of online music services in Europe. 450,000 tracks are downloaded on average each month.
Current catalogue available in the US is 575,000 tracks, equivalent to over 50,000 albums

The Growth of the online music market (2003)

Developments in the US
Major services now include iTunes (50 million downloads sold in 2003), Rhapsody (350,000 paid subscribers, including RadioPass, as at February 2004) and other emerging services including MusicNet, Napster 2.0, Musicmatch and BuyMusic.com in the US. iTunes, the current market leader (as at February 2004) is said to sell 2.5 million downloads per week. The major US-based services offer up to 575,000 music tracks.

Online music moves to Europe
A critical mass of legitimate online services is taking hold in Europe. The number of tracks available rose from 220,000 to 300,000 (up more than 30%) in the last three months of 2003 - that is the equivalent of 25,000 albums.

In Europe, some 650,000 people are already signed up to more than 50 different legal sites - up from 380,000 in the latter half of 2003. This figure is expected to rise sharply in 2004 as record companies continue license their catalogue for legitimate distribution online.

Consumers can now get music online via a range of payment methods, including paid-for downloads and subscription, from online sites such as MSN Music Club, Virgin Downloads, Tiscali Music Club, HMV Digital Downloads, Fnac, TDC musik, Karstadt and MTV. Demand for these services, powered by the pan-European distributor OD2, rose sharply in 2003.

Highlights of new online music services in 2004
In the first quarter of 2004, there were a number of new service launches or significant developments in existing services around the world, most notably the following:

MyCokeMusic.com launched in the UK in January, helping to drive the steep spike in download sales in the UK reported as 151,000 in January. Meanwhile, OD2 announced the forthcoming rollout of its new generation online jukebox technology SonicSelector.
Puretracks, the Canadian online music service launched by Moontaxi Media in October 2003, surpassed the one million downloads mark in February 2004 and has received very positive reviews in the Canadian media.
In Germany, the two largest internet service providers announced in March new online music developments. AOL Germany launched a new service with over 100,000 tracks. T-Online announced an expansion of its new Musicload service following launch in February 2004, with the addition of repertoire from Universal Music taking the available catalogue to 100,000 songs. Legal offers in Germany are expected to gain further momentum with the imminent launch of PhonoLine, Germany's intermediary technology platform for online retail.
In Italy Rai and Rosso Alice (Telecom Italia) have joined Tiscali, Messaggerie Musicali, and Buongiorno Vitaminic in offering hundreds of thousands of tracks.
In Australia, BigPondMusic.com added Universal to its catalogue in March, upping the catalogue to 250,000.
Universal Music International announced on March the 4th the completion of a comprehensive digital catalogue for license to online and mobile music retailers, containing 300,000 songs. The catalogue is fully license-ready, containing all necessary clearances, digital assets and metadata.
EMI announced in March that there are now 50 online stores around Europe selling EMI music for permanent download, portable and limited CD burns.
Sony announced on March 17th 2004 that it will be launching an electronic music download service in UK, France and Germany in June 2004. The service named "Connect" will offer a large catalogue of more than 300,000 songs, including albums and singles from both major and independent record labels.

What the unauthorised services have not had to think about
Building a legitimate online business is complex, especially in comparison to the ease with which unauthorised sites can set up.