Digital downloads deliver big boost
Updated on 12 October 2007
Digital download sales in the UK will hit a record £163 million this year, a report predicts.
The 45.5% year-on-year growth will help breathe life into the flagging music and video retail sector, according to market analysts Verdict.
Downloading will continue to soar in popularity, with spending expected to hit £600 million by 2012.
Music and video downloads will make up a predicted 13.5% of the total music and video market by that date compared to 4.1% today, Verdict's report says.
The expansion of downloads sold without anti-piracy technology - which means users can make multiple copies - will fuel the boom.
New entrants to the download market such as Nokia and Amazon plus enhanced services from retailers such as HMV, Tesco and Woolworths will challenge the dominance of iTunes, according to Verdict.
Overall, the UK's total music and video retail market will dip by 2.9% to £4 billion this year.
But the sector's prospects are brighter for future years due to the launch of next generation DVDs - Blu-ray and HD-DVD - and the growth in legal downloads.
Verdict analyst Nick Gladding said: "While piracy will continue and CD volumes will decline further, retailers generally are now better placed to cope with new market challenges."
The shift from "physical" media to digital has caused "turbulence" for retailers in recent years, Verdict's UK Music and Video Retailers 2007 report says.
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