Consumers are turning to music more than ever to lift their spirits in the global financial crisis, but are less inclined to pay full price for it, according to business information analysts IBISWorld.
Adding to the woes of the Australian Music Industry, new research by IBISWorld has found that consumers are turning their backs on CDs with album sales plummeting 7.6 percent. Digital album sales rose from 91,000 units in 2005 to 2.85 million in 2008, but they are coming from a “low cost base” according to IBISWorld General Manager (Australia), Mr Robert Bryant.
“While digital music sales are indeed on the rise, as they are coming from a low cost base, this unfortunately does not correlate with a huge jump in absolute dollar terms – leading to a revenue shortfall across the board.”
Ringtone sales have also plunged, with sales falling in both unit and revenue terms in 2007 and 2008 by 3 percent and a hefty 17.3 percent respectively.
Bryant believes this is because mobile phones are now wireless internet devices meaning consumers can download full songs from providers such as iTunes and bigpond which they use as ringtones, rather than paying for the 30-second version.
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