Overview:

In this Industry Report

2006 is the year that online music went truly mass market in Europe. Screen Digest expects that European consumer spending on online music will reach Euro280m by the end of 2006 - more than double the Euro121m spent in 2005. By 2010 consumer spending on online music will generate more than Euro1.1bn.

As well as providing detailed historical and forecast data on the online and overall music markets for 16 Western European markets, the report also analyses the causes of declining revenues for the music industry. It acknowledges that a broader view must be taken to understand and address the change in consumer behaviour.

It is easy to point the finger at piracy but factors like the gradual erosion of music dedicated shelf space in big retailers like HMV and Virgin and its replacement with DVD's, book, games and mobile phones cannot be ignored. Seen in this light the fact that the decline in physical music sales corresponds to the boom in DVD sales begins to look less like a coincidence and more like a cause.

Dan Cryan, Screen Digest analyst and author of the report comments: "Online music has been booming. However, online sales alone are not going to be enough to halt the decline in music sales. The music industry needs to make the most of new delivery platforms. We believe with the right strategy - including mobile and online – that the worst might be over by 2010. The industry must adopt a broader approach to selling music, looking beyond the traditional single and album."

Covered in the report:

• Broadband connections by country 2002 to 2010

• Total music market 2001 to 2010

• Total online music spending by country 2003 to 2010

• Comparison of consumer spending on music and video 2000 to 2006

• Major publisher market shares

• Single track and album downloads and revenues 2003 to 2010

• Subscription music users and revenues 2004 to 2010

• Threats and opportunities

• Analysis of the traditional and online music value chains

• Profiles of pan European service operators

Executive Summary
Business models
Piracy

Methodology

Introduction
Market Size
Broadband
Portable audio devices

The Structure of the music business
The value chain
The global market
Market shares
Universal Music Group
Sony BMG
EMI
Warner Music Group
Independents
Distribution Channels
Music publishing

Threats and opportunities
Opportunities

Threats
Service models and pricing
New business models
DRM
Piracy

Pan European service operator profiles
Apple
Microsoft
Sony
OD2/Loudeye
Napster
Musicload
7 Digital
Phono. le Denmark
24-7 MusicShop
MusicNet
TuneTribe
Wippit
InProdicon
Real Networks

Table and Charts

Executive Summary
The following definitions are included for the avoidance of doubt.
Western Europe broadband connections

Introduction
Western Europe portable music players
Total Western Europe music market
Traditional music industry value chain
Western European music market size
Western Europe relative market size 2005
Consumer spending on music and video
Music market share 2004
MCPS-PRS Podcasting licence

Threats and opportunities
Annual single track downloads
Annual single track download revenue
Annual album downloads
Annual album download revenue
European downloads by type
European download sales revenue
Selling Madonna
Subscription music users
Subscription music revenues
Total online music revenues
Straight music industry value chain
How podcasts work
Forked music industry value chain
Major music retailers and their 3rd party suppliers
European download market revenues shares
Average single track download costs
Attempts to close Allofmp3.com
Western Europe total a la carte and subscription revenues
Average price of a single track download
(Allofmp3.com vs leading European services)
iPod worldwide cumulative sales

Pan European service operator profiles
ITMS downloads
OD2 clients by country
Napster worldwide subscribers
Napster worldwide quarterly revenues
Musicload downloads since launch
Musicload stores
24-7 MusicShop customers