Legal download services set to take off in UK : 25:3:2004

UK consumers have access to the widest range of legal music download services in Europe. And 2004 is set to see the launch of even more.

BPI estimates suggest more than 300,000 music files are available legally over the internet in the UK.

A milestone was reached in January 2004 when sales of legal downloads in the UK hit 150,000, overtaking both cassette singles and 7 inch singles.

The UK’s legal downloading infrastructure is growing rapidly. Over the past week alone it has been announced that:

> Since its launch in January 2004, Mycokemusic has already sold over 100,000 downloads. This week the site announced it had received its one millionth visitor;

> Wippit last week announced it has added BMG to its list of licensees. With its deal last month with EMI, this will add 90,000 tracks to the 60,000 tracks from independent labels it already has available.

> Recordstore.co.uk announced last Thursday (March 18) that it is now selling downloads alongside physical product.

Three factors expected to stimulate market growth:

> Promotion: The Official UK Chart Company has announced that it will launch the UK’s first Download Chart later this year. This is expected to provide a promotional focus for downloads and lead to a big increase in legal download sales;

> US entrants: Napster 2.0 has announced that it will be launching in the UK later this year. The addition of other US operators such as Rhapsody and iTunes is expected to further boost the market;

> New UK operators: At least eight separate new UK-based download services are thought to be planning launches during this year.

> Market conditions: the steady growth of broadband penetration (expected to double to 5.6m homes by the end of next year) will increase consumers’ ability to take advantage of legal services;

> Business-to-business infrastructure: A whole series of companies like MetaCharge, 7 Digital Media and The Music Engine are emerging to support the music industry’s move online.

US model points to digital future:

An indication of the way the UK market could develop comes from the US, where iTunes last week announced it had delivered its fifty millionth download since its launch last April.

The iTunes service has been heavily marketed by Apple and, alongside Napster, has become a widely recognised brand name in online music.

Since the second half of 2003, there has been a flurry of new launches and existing service enhancements in the US. In January 2004 retail chain Wal-Mart started testing a digital service. Real Networks launched its Realplayer Music Store offering over 300,000 tracks and Sony announced the launch of its Connect download service  - also set to come to Europe - featuring 500,000 tracks.