NEW YORK, NY (January 29, 2008)–Worldwide spending on recorded music is predicted to decline to $26.2 billion in 2011, from $31.8 billion in 2006--as digital continues to gain steadily on traditional physical music formats.

Digital formats such as online downloads, ringtones, mastertones and full tracks delivered to mobile handsets and multimedia devices, and Internet and mobile subscription services are providing new and growing revenue streams. The UK is helping to define that trend, since it leads Western Europe in digital music growth.

Music marketers and brands are coming together in a greater number of venues. Online and mobile music have been gaining on physical audio formats (LPs, cassettes, CDs, audio DVDs, SACDs and MiniDiscs) and are projected to have more than half the share of worldwide music share by 2011. Online and mobile will account for 56.5% of recorded music spending in 2011, up from 9.1% in 2006, according to Paul Verna, eMarketer senior analyst who authored the report, Recorded Music: Digital Falls Short.

One of the latest and most closely watched fronts in this new marketing model are ad-supported music sites. Western Europe includes the third, fourth and fifth-largest music markets in the world: the United Kingdom, Germany and France, respectively, according to the International Federation of the Phonographic Industry (IFPI).

As the largest Western European market, the UK is expected to push growth in the digital music category, with expected revenues of £286 million in 2011, up more than six-fold from £45 million in 2006.

One study shows that 53% of Internet users in Britain say downloading music is their top entertainment and leisure activity online.

So it is clear that the next challenge for marketers is to demonstrate to music companies and music sites that ad-supported models will be mutually beneficial and will stimulate music sales globally.

For Paul Verna’s comments on the global music space and Qtrax, reach out to eMarketer media contacts listed below.

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