Digital Music Revenues Set To Soar, Says Sony BMG

 

By Laurie Sullivan , TechWeb Technology News

An upswing in revenue from digital track and album sales at Sony BMG Music Entertainment has led to some unusual partnerships with telecommunication carriers, mobile handset makers and social network sites. What's more, digital sales and service now account for around 20 percent of the company's digital music division, said Thomas Hesse, president of Global Digital Business at Sony BMG Music Entertainment, in an interview Wednesday at the Digital Music Forum West in Hollywood.

That percentage should rise "significantly" when someone figures out how to make platforms interoperable. Hesse expects digital revenue to rise between 50 percent and 60 percent in 2006.

One thing's certain, with the rise in digital sales, music labels now must deliver a multitude of digital content to a variety of distribution outlets. Traditionally, music sold through one channel, retail stores. Now, ringtones, videos and songs launch on iTunes, Rhapsody, MTV, and other sites, and all must coincide with artist appearances and the launch of physical media on CDs in stores.

Supporting the digital products are new partnerships with Yahoo, Google, RealNetworks, MySpace, Cingular, Verizon, Sprint, Motorola, Sony Ericsson, Nokia and many others.

On average, 4.1 million, or 2.1 percent of the 190 million U.S. cellular subscribers, used their mobile phone as a music player in August, according to M:Metrics Inc. The research firm estimates that number slides in Europe to 649,490.

At Sony BMG, digital music sales contributed 19 percent to U.S. revenues during the first six months in 2006. Korea led the way with 32 percent; Japan, 11 percent; Italy, 10 percent; United Kingdom, 8 percent; France, 5 percent; and Germany 4 percent.

Hesse said $1 in every $5 that Sony BMG generates in U.S. music sales now comes from digital content. The percentages should rise in 2007. The handset makers and carriers will contribute to music industry revenues next year, as more digital music content makes its way to the phone. But while Hesse pointed toward opportunities with social network sites, a lack of copyright enforcement on sites like MySpace, YouTube and others remains an issue. Only 6 percent of U.S. consumers use legitimate sites to download music, he said.

www.gobrainstormconsulting.com
www.brainstormconsulting.blogspot.com

---

More new features than ever. Check out the new AOL Mail!