music report

VisionConsult's Internet Music Report

340 pages

Single User Internet Music pdf download.. £1,695 (US $2,495)

order form for report in pdf format

Audio Interview on the Report

The 300 page report includes data from interviews carried out in the USA and Europe, including research at the NAB Convention Las Vegas, Streaming Media West San Jose, NetSounds and DDMI in London and Narrowcast and the Real Conference in Paris. Vision's research schedule allowed us to check our assumptions with streaming media industry leaders like Rob Glaser and Robert Madge.

'The music industry is a $100 billion industry trapped inside a $40 billion body' (Carolyn Carter, VP, MP3.com)
'MyMP3.com, Napster and Gnutella are ..the ringleaders of piracy'
(Edgar Bronfman, Jr., Seagram/Universal)
'If it doesn't play MP3, it's an expensive paperweight' (Rob Glaser, RealNetworks)
'Cool!' (Bill Gates, Microsoft, referring to Sonicbox)

Vision Forecasts:

	World broadband music revenues will reach $2.5 billion by 2005
	US online CD sales will exceed $1 billion in 2000
	North American music internet download/streaming revenues will reach $2 billion by 2005
	Streaming formats will become the prime delivery medium

Included are forecasts with supporting spreadsheets to assist in the modelling of your own business plans, including world broadband forecasts for the USA, Europe and other regions to 2005.
The music industry needs the new energies and technologies of the Internet to expand from its low growth rates and restimulate demand. But how can this be profitably and securely achieved? The 340 page report answers key questions, and looks closely behind the hype, including:

	Will MP3 downloads or streaming be the prime future delivery mechanism?
	How many people download music on the Internet?
	How many people use file swapping programs like Napster?
	What is the estimated value of piracy? How many people have pirated MP3 files?
	What are Vision's Industry Forecasts, scenarios and business models to 2005, for world internet, broadband, broadband multimedia music, and music ecommerce?
	What are on-line music locker services, and what impact will they have on music online sales?
	What are the latest digital rights management and music encryption services?
	What are the forecasts of leading industry analysts for music downloads and online sales?
	What are the prospects and forecasts for new technologies such as WAP, mobile internet, and internet radios and devices?
	How is the balance of streaming power changing between Real, Microsoft and QuickTime?
	How many portable music players will be sold, and how significant is this for the growth of digital music downloads?
	What are the financial data and share price histories of major players?

Internet music sites are showing strong growth, stimulated by the notorious PR activity of the Napster and MP3 law suits. Napster's monthly users are estimated at up to 4.7 million, but this still means that less than 5% of internet users access Napster a month: either very high, or very low, depending upon your opinion. This audience is less than a typical top porn site. The value loss of "pirated" music by MP3 sites is probably exaggerated, as the audience that goes to the effort of this inelegant (and slow) means of downloading and storing music is unlikely to pay much for this music (76% say they wouldn't pay anything). In other words, just because something is free, it doesn't mean it has a value.

However, other research in May 2000 estimated that 4.2 million people have 91 million pirated music files on their hard drives, and that an astonishing one third of internet users are downloading free music at least once a month, and 17% once a week.

Pew Internet says 35m Americans (38% of Internet users) have enjoyed music online: the job now is to monetize this potential with user friendly pay services.

Media players have become prime time, with about 50% of the internet active universe using them. The Internet market is becoming well developed for the introduction of elegant, simple, user friendly pay music models.

Previous research has estimated that 25% of US music sales will be online by 2004 ($4bn), 25% of which could consist of online downloads ($1bn). Vision believes that music is well on the way to reaching or exceeding these numbers. Vision forecasts $1bn for on-line US CD sales (physical, not downloads) already for 2000. Our assumptions are based on facts such as: Amazon's US music sales were running at an estimated annualized rate of $250 million in the fourth quarter 1999, and CDNow's 1999 sales were $147m. That makes Vision's forecast of $1bn for online sales seem very possible (or conservative) for 2000.

Also see the assumptions and models that support Vision's forecast that North American music internet download and streaming revenues will reach $2 billion by 2005.