New entrants into the digital download market, including Nokia and Amazon, plus reinvented download offers from high street retailer types like HMV, Tesco and Woolworths will challenge iTunes' dominance in the digital entertainment sector. Not my words, but the words of retail analysts Verdict, who have just published a report on the digital entertainments market.
The research says digital download sales in the UK this year will hit £163 million, a 45.5% growth year on year. Researchers also reckon similar growth will continue in the coming years so that by 2012 annual download spend will be £600 million. The boom, which Verdict say will be further fuelled by the increasing availability of digital content without DRM, will mean that music and video downloads will soon make up 13.5% of the overall music and video market, compared with 4.1% today.
The generally optimistic report concludes that that growth, coupled with the boost new high definition DVD technology will bring to the video space, will help the wider music and video industries recover from recent sales declines. Traditional retailers are also expected to gain a bigger slice of the market, which is currently dominated by Apple's download store.
Verdict analyst Nick Gladding told reporters: "While piracy will continue and CD volumes will decline further, retailers generally are now better placed to cope with new market challenges".