Physical CDs and LPs still outnumber downloads

Despite impressive growth in online music sales this year, CDs and LPs together are still outstripping digital downloads, according to a new study from market research firm Gartner.

Sales of online music are expected to grow more than 31 per cent by 2015 to $7.7 billion, but despite a slide in physical music format sales from around $15 billion in 2010, CDs and LPs are still expected to outstrip their digital equivalents, with total sales of $10 billion.

But it isn't all doom and gloom for digital music, though. One of the study's key findings was the growth of music subscription services, where streaming as well as downloads would pave the way of the future.

"Online music subscription services, such as Spotify, will be the main growth sector in this market, showing fivefold growth from 2010 to 2015. A la carte sales will drive the bulk of overall revenue," says the report.

Gartner also found that some of the biggest growth in music sales occurring in areas such as Latin America, the Middle East and Africa, which are becoming quickly more connected via the internet. The popularity of social networks could help to spread not only information about how to get hold of music, but the tracks themselves, says Gartner.

"Online music service providers (retailers or subscription service providers) must continue to invest in compelling shopping or consumption experiences that provide search, discovery, recommendation and taste-sharing capabilities," recommended Gartner. "These efforts must be tightly integrated with efforts to extend service, via applications, to popular devices."

Note that there isn't a single note on DRM in that quote. Gartner recommends increasing the availability of music, making it easy to access and it simple to explore new genres and find new music.

Gartner also goes on to recommend greater integration with social media in music distribution methods, along the lines of Spotify's recent deal with Facebook.