After six years of steady decline, the global music market is set to grow again spurred on by increased consumption of digital music through multiple channels with annual revenues predicted to reach $38.8 billion by 2011.
The study by Portio Research predicted a healthy future for the music business based on the success of existing wireline and nascent over-the-air (OTA) services provided by mobile network operators.
In 2007, the report projected that over half of the 1 billion mobile handsets shipped will have music playing capabilities. "While worldwide sales of stand-alone MP3 music devices will continue to grow, sales will level out by 2012, by which time MP3-enabled mobile handsets will outnumber stand-alone MP3 players by approximately 5 to 1."
OTA music downloads, it added, have the potential to be one of the most successful non-voice services after SMS, providing prices remain attractive to consumers.
The report highlighted many opportunities that music offers for some of the worlds largest brands, from device and handset vendors like Nokia, Sony Ericsson, and Apple, software companies such as Microsoft, mobile network operators, advertisers, and of course digital rights owners.
This battle for the lucrative music business will take place in the wealthiest and biggest world markets -- Japan and South Korea, Western Europe, North America, Mexico, Brazil, South Africa, Hong Kong, Singapore, Australia, New Zealand, Russia and more with some of the biggest youth-sector brands such as McDonalds, Coca-Cola, Pepsi, Nike, Reebok and Adidas possibly involved in sponsoring and advertising deals.
While there are huge opportunities, the report also said there are threats from the "sort of unexpected change" experienced by the photographic industry which less than 10 years ago was still based on film.
It also cited "a number of specific industry issues that need to be addressed and, in particular, an exhortation for the record labels not to be greedy, which has resulted in falling revenues and been a major spur to piracy in the past."