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March 26, 2008 15:28 ET

Key Challenges and Issues Facing the World Music Recording Industry Market

LONDON, UNITED KINGDOM--(Marketwire - March 26, 2008) - Reportlinker.com announces that a new market research report related to the Music industry is available in its catalogue.

World Music Recording Industry Market

This report analyzes the worldwide markets for Music Recording Industry in Millions of US$. The report provides separate comprehensive analytics for the US, Canada, Japan, Europe, Asia-Pacific, Latin America, and Rest of the World. Annual forecasts are provided for each region for the period of 2000 through 2015. The report profiles 235 companies including players worldwide such as EMI Group, Plc., Sony BMG Music Entertainment, Universal Music Group, and Warner Music Group. Market data and analytics are derived from primary and secondary research. Company profiles are mostly extracted from URL research and reported select online sources.

CONTENTS

I. INTRODUCTION, METHODOLOGY & PRODUCT DEFINITIONS

Study Reliability and Reporting Limitations I-1

Disclaimers I-2

Data Interpretation & Reporting Level I-2

Quantitative Techniques & Analytics I-3

Product Definitions and Scope of Study I-3

II. EXECUTIVE SUMMARY

1. Industry Overview II-1

The Entertainment Industry II-1

Recorded Music Industry - A Key Driver for the Commercial Music Sector II-1

Digital Music Industry - A Perspective II-2

Digital Recorded Music Market in Full Gear II-2

Table 1: Global Digital Music Market (2005 & 2006): Number in Millions (includes corresponding Graph/Chart) II-3

Table 2: Global Digital Music Market (2005): Percentage of Sales through Online and Mobile Channels by Select Country - USA, Japan, France, Germany, UK, Italy, Canada, Australia, Netherlands, and South Korea (includes corresponding Graph/Chart) II-4

Digital Format Drive Classical Music Sales II-4

Record Companies Expand Digitized Catalogue Portfolio II-5

Mobile Music Catching Up II-5

Ringback Tones - A Novel Music Format Picking Up II-5

Music Turns Functional Mobile into Personal Entertainment Gizmo II-5

The Music Store Industry II-6

Online Music-Opportunities Galore II-6

Legal Online Music Services in Select Countries II-7

Single Track Downloads Witness Robust Growth II-8

Table 3: Select Countries for Legitimate Downloads of Single Tracks (2004) - USA, Germany, UK, and France (In Million) (includes corresponding Graph/Chart) II-8

Rapid Sales of Portable Music Players Spur Digital Music Market II-8

Social Networks: A Boon for Music Industry II-8

Paradigm Shifts in Business Models II-9

Table 4: Global Music Market (2004 & 2005): Trade Revenues in US$ Million by Format - CD, DVD, Digital, Singles, and Other Physical (includes corresponding Graph/Chart) II-9

From Phonograph to Digital Media II-10

Phonographs / Discs II-10

Tape Recorders / Tapes / Cassettes II-10

The Digital Revolution II-11

Digital Music: The New Era II-12

Table 5: Global Music Market (2005): Percentage of Digital Singles Sales by Select Region/Country - USA, EU, UK, Germany, France, Japan, and Australia (includes corresponding Graph/Chart) II-13

Digital Technology Transforms Concept of Property Rights in Music Industry II-13

Piracy Makes the Killing II-13

Digital Stream Ripping - A New Type of Piracy II-14

Competitive Scenario II-14

Music Distribution System II-14

Table 6: Leading Players in the Global Music Market (2005): Percentage Breakdown of Value Sales for Universal Music Group, Sony BMG, EMI Group, Warner Music Group, and Independent Labels (includes corresponding Graph/Chart) II-15

2. Market Trends/Issues II-16

Music Recording Industry: Resounding Groans II-16

Issues Facing Record Companies II-16

Music Distribution: Rethinking by the Industry II-16

Record Companies Adopt Innovative Marketing Strategies to Reach Consumers II-17

Music Record Companies Move Towards 'Direct-to- Consumer' Channels II-17

Record Labels Gaining Control of Ringtones Market II-17

Create-Your-Own-Ringtones Fade Away, While Covertones Continue to Sway II-18

Mobile Operators and Record Labels Scratching Each Other's Back II-18

Real Music Ringtones Shape Mobile Operators' Marketing Strategies II-18

Mobile Aggregators: Consolidate or Die II-18

Decreasing Venture Capitalist Funding: Music Portals in the Line of Fire? II-19

Online Services Pricing: Issues Galore II-19

Digital Distribution: Striking Chord II-19

Threat of Legal Proceedings Deter Users from Illegal File Sharing II-20

Gradual Growth in Legal Downloading of Music II-20

'Pay-Per-Play' Sales Model: Any Takers? II-20

P2P File Sharing: The Legal Napster II-21

Online Music Distribution: Overwriting Traditional Business Models? II-21

Emerging Access Technologies: Need for New Controlling Mechanism II-21

3G Technology: Phone Music II-22

Savos' MediaCrossbar Technology II-22

Online Music Commerce: A Step Ahead II-22

Table 7: Global Online Music Market (2006): Percentage Share by Key Purchase Driver for Consumers - Portable Player, Broadband, Lower Cost than CDs, and Voucher (includes corresponding Graph/Chart) II-23

Advertising-Supported Services - A Novel Revenue Generation Channel II-23

Orchestrated M&A Activity in the Recent Past II-23

Licensing: Still the Hot Issue II-24

Streaming Audio and Digital Downloads: Different Forms, Same Music II-24

Consumer Behavior and Demographics: Key to Better Positioning II-24

The Gender Fare: Increasing Music Purchases by Women II-25

MP3 Format: Out of Tune? II-25

Fate of Audio Books II-25

Music Videos: Coming of Age II-26

Audio CD/DVDs: End of Pre-Recorded Cassettes? II-26

Film and Music Industries: Synchronized Profits II-26

3. Music Distribution II-27

Leading Recording Company/Label Worldwide (2004) - Universal Music Group, Sony BMG, EMI Group, and Warner Music II-27

Leading Selling Music Albums Worldwide (2004) II-27

Recording Labels & Distribution Companies: Vital Signs of the Industry II-28

Table 8: Global Recorded Music Market (2005): Retail Sales of Different Physical Music Formats (Singles, CD, & DVD) in Million Units by Select Country - USA, Japan, UK, Germany, France, Mexico, Russia, Canada, Brazil, and Spain (includes corresponding Graph/Chart) II-28

Table 9: Global Recorded Music Market (2005): Retail Sales of Different Physical Music Formats (Singles, CD, & DVD) in US$ Million by Select Country - USA, Japan, UK, Germany, France, Italy, Canada, Australia, Spain, and Netherlands (includes corresponding Graph/Chart) II-29

Facing the Digital Challenge: Music Industry in the 21st Century II-29

Online Digital Distribution II-30

Subscription Services II-30

Digital Downloads II-30

Internet Radio II-30

File Sharing (P2P Networks) II-30

Music Sites II-31

Music Licensing Platforms II-31

e-commerce / Shopping Aids II-31

Digital Kiosks II-31

Allied Industries II-32

Film / Television Soundtracks II-32

Electronic Games II-32

4. Music Hardware & Formats II-33

Hardware II-33

Portable Media Players II-33

Table 10: Global Market for Portable Digital Audio Players(i) (2000, 2001 & 2005) (includes corresponding Graph/Chart) II-33

Table 11: Global Optical Disc Market (2000): Production in Billion Units by Format - CD Audio/CD-ROM, CD-R, DVD, and Others (includes corresponding Graph/Chart) II-33

Music Formats II-34

Digital Audio II-34

Popular Digital Audio Formats II-34

Common File Formats II-34

WAV II-34

AIFF and AU II-34

PCM II-35

DPCM II-35

ADPCM II-35

m-Law Compression II-35

MPEG Audio II-35

Proprietary Formats based on MPEG II-35

a2b II-35

Liquid Audio II-36

MP4 II-36

Apple QuickTime II-36

Non-MPEG Proprietary Formats II-36

Dolby Digital (AC-3) II-36

EPAC II-36

Windows Media Audio II-37

RealAudio II-37

TAC II-37

TwinVQ (VQF) II-37

Streaming Audio II-37

Streaming Audio Systems by Format & Developer II-37

5. Copyrights & Digital Rights Management II-38

Copyrights II-38

Copyrights and Music Industry II-38

Copyrights and the Internet II-38

Methods of Copyright Protection II-38

Encryption II-39

Watermarking II-39

Fingerprinting II-40

Piracy II-40

The General Meaning II-40

Classification II-40

Simple Piracy II-40

Counterfeits II-41

Bootlegs II-41

Pirated Music Recordings: Identification II-41

Online Piracy II-41

Copyright and Intellectual Property Education - Key to Handling Piracy II-41

Digital Rights Management II-41

Superdistribution II-42

Streaming II-42

'Bridgeport' from SuperTracks II-42

6. Regulatory Environment II-43

Legal Framework II-43

The Berne Convention II-43

The Rome Convention (1961) II-43

The Geneva Phonograms Convention (1971) II-44

The Trade Related Intellectual Property Rights (TRIPS) Agreement II-44

The WIPO Treaties II-44

WIPO Copyright Treaty (WCT) II-44

WIPO Performances and Phonograms Treaty (WPPT) II-44

7. Music Piracy 'Industry' II-46

Music Piracy: The Illegal Business II-46

Music Industry: Not the Only Victim II-46

Asian and Latin American Countries: Major Hosts to Music Pirates II-46

Advanced Technology: Boon to Pirates II-47

The Internet 'Opportunity' II-47

Napster: First of the Pack II-48

Songbird - The Anti-Piracy Napster Search Tool II-48

Piracy and Organized Crime: The Nexus II-48

Piracy Fighting Initiatives II-49

International Federation of Phonographic Industry: Fighting a Faceless Enemy II-49

International Intellectual Property Alliance II-49

Secure Digital Music Initiative: Striving for Music Protection II-50

The Need II-50

The Aspiration II-50

The Progress II-51

The Future II-51

Interpol's Intellectual Property Crimes Initiative II-51

The Illegal 'Statistics' II-52

Table 12: Changing Face of Pirate Media in the Global Music

Market (2000 & 2001): Percentage Breakdown by Format - Cassette, CD, and CD-R (includes corresponding Graph/Chart) II-52

Table 13: Changing Piracy Capacities in the Global Music Market (2000 & 2001): Capacity and Demand in Million Units by Select Country - Taiwan, Hong Kong, China, India, Singapore, Malaysia, Indonesia, Russia, Poland, and Macau (includes corresponding Graph/Chart) II-52

Table 14: Global CD Stamping Capacity (2000): Capacity and Demand in Million Units by Select Country - Taiwan, Hong Kong, Singapore, Macau, Malaysia, Czech Republic, Russia, Israel, and Ukraine (includes corresponding Graph/Chart) II-53

8. Technological Scenario II-54

MusicATM ala ATM II-54

Technology: Changing the Face of Music Distribution II-54

Broadband and Wireless Technologies II-54

Music Compression II-55

Optical Storage Media II-55

A Brief Overview of the New Music Media II-55

Compact Discs (CD-R/RW) II-55

Digital Video/Versatile Disc (DVD-R/RW/RAM) II-55

Media of the Future II-56

9. Product Innovations/Introductions II-57

NexTune Launches 2.4 Version of Music Play List Software II-57

EMI Music Offers DRM Free, High Quality Sound Downloads II-57

GoTV Networks and Alltel Wireless Unveil New Music Channels II-57

Finetune Introduces Finetune Desktop Music Player II-57

Apple Rolls Out iTunes Plus in Association with EMI Music II-57

Roxio Unveils RecordNow 9 Music Lab Premier II-58

PlayNetwork Unveils the Maiden Music Podcasting Service II-58

MusicIP Unveils Global Music Relationship Engine with a Host of Services II-58

Televisa Unveils New Media Software Player II-59

On Command Video to Offer NetDriven(TM) Music Application II-59

Zorpia Unveils Social Networking Portal, Zorpia Music II-59

Chicago Symphony to Launch House Record Label II-60

United Virtualities Rolls Out HotRecorder for Media II-60

10. Recent Industry Activity II-61

Universal Music Group Enters into Agreement with IMEEM II-61

Imeem Announces Agreement with Sony BMG Music Entertainment II-61

Sony BMG Music Entertainment Ventures with Dada USA II-61

The Orchard and Digital Music Group Sign Agreement II-61

Universal Music Group Acquires BMG Music Publishing II-62

Live Nation Acquires Majority Stake in Academy Music Holdings II-62

CBS Corporation Takes Over Last.fm Music Discovery Network II-62

Sony/ATV Acquires Viacom's Famous Music Catalogue II-62

Saatchi & Saatchi Partners with Atlantic Records II-62

Fluid Media Partners DiskFaktory to Introduce MFA Music Distribution System II-63

Zune Partners with Gallo Music for Digital Delivery of Gallo's Music Collection II-63

Fontana and Trustkill Records Form Partnership II-63

Network Foundation Technologies Partners with Friday Morning Quarterback II-63

Circuit City Stores to Partner with Napster II-64

Digital Music Group Expands Music Catalog II-64

Global Music Enters into Licensing Agreement with Sony BMG Music II-64

RealNetworks and Vodafone Sign Agreement to Support Music Service in Europe II-64

Digital Music Group Signs Digital Music Download Sales Agreement with iTunes II-65

EMI Music and Amazon.com Enter into Agreement II-65

EMI Music France Inks Agreement with VirginMega II-65

Grooveshark and V2 Music Group Enter into Licensing Agreement II-65

EMI Music, YouTube and Google Sign Agreement for Recordings and Videos Access II-66

Thumbplay and EMI Music Enter into Agreement II-66

Akoo International and Universal Music Enterprises Enter into Licensing Agreement II-66

PassAlong Networks Signs Agreement with Nettwerk Music and Digonex Technologies II-67

EMI and Apple Ink Agreement to Revolutionize Digital Entertainment Industry II-67

ArkivMusic and EMI Classics Reach Agreement on Out-of-Print Classics II-67

CenterStaging Musical and Billboard Sign Agreement II-67

Musicnotes Signs Licensing Agreement with Harry Fox Agency II-68

Traffix Signs Ten-Year License Agreement with Madacy Entertainment II-68

Aerofoam Metals Approves Sub-Licensing Agreement with M Groupe Entertainment II-68

Gold Entertainment Group and Reggae.com Start New Music Label II-68

Tourdesign Creative Establishes Tourdesign en Espanol II-68

Starbucks and Concord Music Group Form New Record Label II-68

Machete Music Launches Machete Regional Division II-69

NT Media Establishes Online Music Store II-69

Navarre Corporation Divests Independent Music Business II-69

Universal Music Group Acquires Arsenal Music II-69

Logitech International Takes Over Slim Devices II-69

Amerom Television Acquires TV K Lumea II-69

EverGreen Copyrights Acquires Integrated Copyright Group and Music Catalogs II-70

Warner Music International to Form WS Entertainment with SK Telecom II-70

Warner Acquires Roadrunner Records II-70

EMI Music Licenses Song Catalog to Qtrax II-70

Digital Music Group Acquires Green Linnet Records and Affiliate Xenophile II-71

Universal Music Group Acquires Vale Music II-71

Warner Music Group Acquires Ryko Corporation II-71

MTV Networks of Viacom Acquires Harmonix II-72

FreeHand Systems to Acquire Electronic Courseware Systems II-72

Digital Music Acquires Chancellor Records II-72

EverGreen Copyrights Debuts with Acquisition of Five Major Music Catalogs II-72

Live Nation Enters Spanish and French Music Markets II-72

Nettwerk Music Group Enters into Partnership with Mercora II-73

Universal Music Group Partners with YouTube II-73

Sony BMG Partners with YouTube II-73

5Fad and BrainMedia Enter into Partnership II-73

Digimpro and IE Music Ink Strategic Partnership II-74

Asylum Records in Distribution Tie-up with Aphilliates Music Group II-74

WEA Enters into Distribution Tie-up with Union Records II-74

Fontana and Six Degrees Records Form Distribution Deal II-74

EMI Signs Agreement with Vodafone II-74

Shanda Pens Pact with www.Top100.cn II-75

Digital Music Group Forms Four Digital Distribution Agreements II-75

Digital Music Group Forays into Music Videos through Three Distribution Pacts II-75

Digital Music Group Bags Digital Distribution Rights of the Tuff City Music Range II-75

Hidden Beach and Universal Music Enter into Distribution Agreement II-75

Universal Music and Concord Music Form Global Distribution Agreement II-76

Universal Music Forms Agreement with Microsoft Corporation II-76

Musicbrigade and EMI Music Enter into Agreement II-76

Fontana Enters Pact to Market Swank Recordings II-76

Mobile Interactive Group Enters into Partnership with FRUKT II-76

Gracenote Expands Digital Lyrics Catalogue II-77

Warner Music and Google Enter into Strategic Business Agreement II-77

FunMail Forms Licensing Agreement with Universal Music Mobile-US II-77

XM Satellite Radio Renews Licensing Contract with ASCAP II-77

MobileActive Inks Licensing Agreement with UMG II-78

MySpace.com Acquires License for Gracenote's MusicID Audio Fingerprinting Technology II-78

Devine Enters into Agreement with SONY II-78

FreeHand Systems Enters into Agreement with People's Music in China II-78

Conn-Selmer and Walt Disney World to Develop Programs Supporting Music Education II-79

Skype Announces Global Music Licenses with Key Music Publishers II-79

Qpass Expands Agreement with Skype II-79

Digital Music Group Forges Multi-Year Pact with Pipeline Music II-79

Digital Music Group Pens Long-Standing Distribution Pact with Lobster Records II-80

LTDnetwork Inks Licensing Agreement with EMI Music II-80

Universal Music Launches Universal Music Christian Group II-80

BMG Buys Complete Music from Martin Costello and Iain McNay II-80

Titan Global and Alliance Entertainment Sign Marketing Agreement II-81

Fuego Inks Licensing Contract with Ciocan Entertainment and Music Group II-81

AOL Acquires MusicNow II-81

Iron Mountain Acquires Fort Lee Assets II-81

NetMusic Entertainment Acquires The PAN Network II-82

SNOCAP Enters into Agreements with Leading Independent Music Labels II-82

Groove Mobile Enters into Agreement with Digital Rights II-82

EMI Music Signs Content Agreement with T-Mobile II-82

Gotuit Media Signs Agreement with KOCH Records II-82

France Telecom and Warner Music Enter into Partnership Agreement II-83

VendTek and Moontaxi Sign Distribution Agreement II-83

Warner Music and MTV Enter into Licensing Agreement II-83

KoRn Enters into Joint Venture with EMI II-83

EMI Music to Market Music Catalogue of Buena Vista Music Group II-84

Universal Music Group Obtains Distribution Rights from Walt Disney for Latin America II-84

Universal Music Group Launches Studios in New York City II-84

Warner Music Launches Cordless Recordings II-84

United Virtualities Introduces Music Conversion Tool II-85

Warner Music Acquires Festival Mushroom Records II-85

EMI Music Launches New Album through Mobile Operator II-85

Warner Music in Joint Venture with Bad Boy Entertainment II-85

Karrington Holdings Signs Agreement with Solomon-The Band II-86

XM Acquires Effanel Music II-86

Sony BMG Introduces Global Marketing Group II-86

Universal Music Group Introduces Machete Music II-86

Universal Music Group Launches Universal Music Mobile II-86

Chaoticom Strikes Deal with EMI Music II-87

Zomba Label Group Acquires GospoCentric Records II-87

Warner Music Sold for US$2.6 Billion II-87

Napster and Best Buy Enter into Marketing Agreement II-87

Napster and Imation Enter into Partnership II-88

EMI Music Publishing and Sony BMG Introduce New Digital Products II-88

GK Intelligent Systems Acquires The Warehouse Recording Studios II-88

EMI Music Sells Australian CD Plant to Summit Technology II-88

WMD Holdings Acquires ProgRock Records II-89

EMI Music and Wippit Sign Agreement II-89

Napster Enters into Agreement with the US Military II-89

Napster Launches Canada Operations II-89

Sonic Solutions Acquires Consumer Software Division of Roxio II-90

Sony Music and BMG Merge II-90

Mediaport Entertainment and Warner Music Sign Agreement II-90

Roxio to Re-launch Napster, Acquires Pressplay II-90

RealNetworks Buys Listen.com II-91

Universal Slaps Lawsuit against Bertelsmann over Napster II-91

Bertelsmann's Acquisition of Napster Fails to Fall Through II-91

Bertelsmann's Zomba Proposal Gets European Commission's Green Signal II-91

Rioport Merges with Ecast II-92

BMG Fully Acquires J Records II-92

MUSICMATCH(R) in Licensing Deal with Music Majors II-92

Listen.com Secures Deal with Verizon Online II-92

Rhapsody in Major Distribution Agreement II-93

Digimarc and Activated Content in Licensing Agreement II-93

DJ Power Signs Licensing Agreements with AIM II-93

Listen.com Signs Agreement with BMG II-93

Listen.com and Warner Music in Licensing Deal II-93

Listen.com Signs Agreements with Music Majors II-94

Streamwaves in Licensing Agreement with BMG II-94

EMI Sells Stake in Viva Media II-94

Copy-Protected CDs from Sony II-94

Liquid Audio Launches 'Burn It First' II-94

Clear Channel Introduces Web Subscription Services II-94

New Music Subscription Service from OD2 and MSN II-95

RioPort Launches New Copyright Protection System II-95

Vivendi Universal Acquires MP3.com II-95

EMI Survives Potential Merger II-95

Bertelsmann's eCommerce Group Acquires Myplay.com II-96

Yahoo Acquires Launch Media II-96

Roxio and EMI Recorded Music in Strategic Partnership II-96

EMI in Strategic Deal with Virtuebroadcasting.com II-96

FullAudio in Licensing Agreement with Universal Music Group II-97

Napster Signs Deal with Vitaminic II-97

FullAudio Signs Licensing Deal with EMI II-97

Vitaminic and Verbatim in Distribution Agreement II-97

FullAudio and BMG Music in Licensing Deal II-97

Hewlett-Packard and Soundbuzz in Partnership II-97

Napster Signs Agreement with MusicNet II-98

PlanetMG Launched in Taiwan II-98

Streamwaves.com Launches Streaming Subscription Service II-98

Online Subscription Service from RadioMX II-99

Uplister Launches Music Service II-99

MP3.com Launches New Music-Licensing Program II-99

EMusic.com Launches New Service II-99

'RealOne Music' Digital Subscription Service from RealNetworks II-99

Listen.com Launches Rhapsody II-100

MusicNet Launched II-100

BT Openworld Launches New Subscription Service II-100

Pressplay Expands Offerings II-100

MP3.com Technology to Power Pressplay II-101

The International Federation of the Phonographic Industry Patents Encryption Technology II-101

Sony Music and Universal Music Form Joint Venture II-101

BMG and Napster in Alliance II-101

Edel Music and News Corp. in Licensing Agreement II-101

Recording Industry Association of America and Yahoo in Music Licensing Pact II-102

Soundbreak.com in Royalty Payment Deal with Recording Industry Association of America II-102

Recording Industry's Digital Distribution Initiative: SoundExchange II-102

MP3.com Launches New Division II-102

MP3.com Reactivates 'My.MP3.com' II-102

MP3.com Launches Classical Music Channel II-103

Sony Joins the Internet Music Bandwagon II-103

11. Focus on Select Global Players II-104

EMI Group, Plc (The United Kingdom) II-104

Sony BMG Music Entertainment (USA) II-104

Universal Music Group (USA) II-104

Warner Music Group (USA) II-105

12. Global Market Perspective II-106

Table 15: World Recent Past, Current & Future Analysis for Music Recording by Geographic Region - USA, Canada,Japan, Europe, Asia-Pacific (excluding Japan), Latin America, and Rest of World Markets Independently Analyzed withAnnual Sales Figures in US$ Million for Years 2000through 2010 (includes corresponding Graph/Chart) II-106

Table 16: World Long-term Projections for Music Recording by Geographic Region - USA, Canada, Japan, Europe, Asia-Pacific (excluding Japan), Latin America, and Rest of World Markets Independently Analyzed with Annual Sales Figures in US$ Million for Years 2011 through 2015 (includes corresponding Graph/Chart) II-107

Table 17: World 11-Year Perspective for Music Recording by Geographic Region - Percentage Breakdown of Dollar Sales for USA, Canada, Japan, Europe, Asia-Pacific, (excluding Japan), Latin America, and Rest of World Markets for Years 2000, 2007 & 2010 (includes corresponding Graph/Chart) II-108

III. MARKET

1. The United States III-1

A. Market Analysis III-1

Current & Future Analysis III-1

Music Market - A Perspective III-1

Table 18: Music Market in the US (2005): Percentage Breakdown of Recorded Music Sales by Segment - Traditional (CDs and Others), and Internet or Digital III-1

Table 19: Music Market in the US (2002-2008): Sales of Music Downloads in US$ Million (includes corresponding Graph/Chart) III-2

Table 20: Digital Music Market in the US (2005 & 2006): Number in Million (includes corresponding Graph/Chart) III-2

Table 21: Recorded Music Market in the US (2006): Album Sales in Units by Title/Artist - Soundtrack / High School Musical, Me and My Gang / Rascal Flatts, Some Hearts / Carrie Underwood, All the RightReasons / Nickelback, Futuresex/Love / Justin Timberlake, Back to Bedlam / James Blunt, B'day / Beyonce, Soundtrack/ Hannah Montana, Taking the Long Way / Dixie Chicks, and Extreme Behavior / Hinder (includes corresponding Graph/Chart) III-3

Table 22: Recorded Music Market in the US (2006): Sales in Units of Digital Songs by Title/Artist - Bad Day / Daniel Powter, Promiscuous / Nelly Furtado, Sexyback / Justin Timberlake, Crazy / Gnarls Barkley, You're Beautiful / James Blunt, Over My Head (Cable Car) / Fray, How to Save a Life / Fray, Temperature / Sean Paul, Ridin' / Chamillionaire, and Hips Don't Lie / Shakira (includes corresponding Graph/Chart) III-4

Table 23: Recorded Music Market in the US (2006): Sales in Units of Digital Albums by Title/Artist - How to Save a Life /Fray, Continuum / John Mayer, FutureSex/ LoveSounds / Justmin Timberlake, Curious George / Jack Johnson & Friends, Back to Bedlam / James Blunt, Soundtrack / High School Musical, Stadium Arcadium / Red Hot Chili Peppers, Taking the Long Way / Dixie Chicks, Fever You Can't Sweat / Panic! At the Disco, and Me and My Gang / Rascal Flatts (includes corresponding Graph/Chart) III-5

Legal Online Music Services in the US III-6

Leading Players III-6

Table 24: Leading Players in the US Music Market (2005): Percentage Breakdown of Value Sales for Universal Music Group, Sony BMG, Warner Music Group, EMI Group, and Independent Labels (includes corresponding Graph/Chart) III-6

Table 25: Music Market in the US (2004): Percentage Breakdown of Sales by Record Company/Label - Jive, Arista, Def Jam, and Others (includes corresponding Graph/Chart) III-6

A Brief Analysis of the US Music Market by Major Genres III-7

Music Categories (Genres) III-7

Table 26: Music Market in the US (2005 & 2006): Percentage Breakdown of Genre - Rock, Country, R&B/Urban, Rap/Hip-Hop, Pop, Religious, and Others (includes corresponding Graph/Chart) III-7

Table 27: Latin Music in the US Music Industry (2006): Shipments in US$ '000 by Format - CD, Cassette, and Music Video (includes corresponding Graph/Chart) III-8

Table 28: Latin Music in the US Music Industry (2006): Shipments in '000 Units by Format - CD, Cassette, and Music Video (includes corresponding Graph/Chart) III-8

Genres in Latin Music III-8

Table 29: Latin Music in the US Music Industry (2006): Percentage Breakdown of Sales by Genre - Regional Mexican/Tejano, Pop/Rock, Tropical, and Urban (includes corresponding Graph/Chart) III-9

Consumer Demographics III-9

Changing Points of Purchase III-9

Table 30: Music Market in the US (2005 & 2006): Percentage Breakdown of Value Sales by Channel - Record Store; Record Club; Internet; Digital Download; TV, Magazine, 800 Number, Newspaper, Advertisement; Concert; and Other Stores (includes corresponding Graph/Chart) III-9

Table 31: Music Market in the US (2005 & 2006): Percentage Breakdown of Value Sales by Gender - Male and Female III-10

CDs Prevail in the Market III-10

Table 32: Music Market in the US (2005 & 2006): Percentage Breakdown of Value Sales by Format - Full-length CD's, Digital Download, Singles (all types), DVD Audio, Full-length Cassettes, Music Videos/Video DVD's, Vinyl LP's, and SACD (includes corresponding Graph/Chart) III-10

Age No Bar for Enjoying Music III-11

Table 33: Music Market in the US (2005 & 2006): Percentage Breakdown of Value Sales by Age Group - 10-14, 15-19, 20-24, 25-29, 30-34, 35-39, 40-44, and 45+ (includes corresponding Graph/Chart) III-11

Market Trends / Issues III-11

Music Piracy: Reaching New Heights III-11

Subscription Services Lack 'Punch' III-11

Record Stores Losing their Charm III-12

Copyright Industries: Fastest Growing Sector III-12

File Exchange Networks Boost Sales III-12

Music Royalties for Internet Radio under Fire III-13

DVD Technology Boosts Music Video Sales III-13

Value Added Paid Online Services Find Takers III-13

Digital Sales Witness Strong Growth III-13

Digital Music Boosts MP3 Player Sales III-14

Marketing of Children Music Becomes Complex III-14

Rising Prominence of Television Promotion for Children Music III-14

College Students: Greatest Fans of Portable Players III-14

Table 34: Type of Audio Players Used by US College Students (includes corresponding Graph/Chart) III-15

Regulatory Environment III-15

Music Copyright Laws III-15

Inception of Copyright Laws III-15

The Copyright Law, 1976 III-16

Radio and Recording Companies' Relationship III-16

The Regulations III-16

No Electronic Theft Law (NET Act) III-16

Digital Millennium Copyright Act (DMCA) (1998) III-16

Digital Performance Right in Sound Recordings Act (DPRA) (1995) III-16

Audio Home Recording Act (AHRA) (1992) III-17

The Aftermath III-17

Napster Clone Audiogalaxy in Legal Muddle III-17

RIAA's Appeal to Internet Service Providers III-17

Madster, a Napster Takeoff, Brought to Book III-18

Small Webcasters and Recording Industry Agree on Royalty Terms III-18

Record Labels Settle Price-Fixing Case III-18

Record Label Waives Internet Royalty III-18

Key Statistics III-19

Table 35: Music Market in the US (2001-2006): Shipments in Million Units by Category - CD, Music Video, Albums, and Singles (includes corresponding Graph/Chart) III-19

Table 36: Music Market in the US (2001-2006): Shipments in Retail Value in US$ Million by Category - CD, Music Video, Albums, and Singles (includes corresponding Graph/Chart) III-19

Table 37: Music Download Market in the US (2004-2006): Shipments in Million Units by Select Category - Download Singles, Download Albums, and Kiosk III-20

Table 38: Music Download Market in the US (2004-2006): Shipments in Retail Value in US$ Million by Select Category - Download Singles, Download Albums, and Kiosk (includes corresponding Graph/Chart) III-20

Recent Past & Historical Statistics III-20

Table 39: Music Market in the US (2003 & 2004): Shipments in Million Units by Format - CD, CD Single, Cassette, Cassette Single, LP/EP, Vinyl Single, Music Video, DVD Audio, SACD, and DVD Video III-20

Table 40: Music Market in the US (2003 & 2004): Shipments in US$ Million by Format - CD, CD Single, Cassette, Cassette Single, LP/EP, Vinyl Single, Music Video, DVD Audio, SACD, and DVD Video III-21

Table 41: Music Market in the US (2001): Percentage Breakdown of Top 10 Albums (includes corresponding Graph/Chart) III-21

Table 42: Music Market in the US (2000 & 2001): Percentage Breakdown of Sales for Country Album Distributors - Universal, WEA, BMG, Sony, EMD, and Indies (includes corresponding Graph/Chart) III-22

Table 43: Music Market in the US (2000 & 2001): Percentage Breakdown of Sales for R&B Album Distributors - Universal, Sony, BMG, EMD, WEA, and Indies (includes corresponding Graph/Chart) III-22

Table 44: Music Market in the US (2000 & 2001): Percentage Breakdown of Sales for Singles Labels - BMG, Universal, WEA, Indies, Sony, and EMD (includes corresponding Graph/Chart) III-23

Table 45: Music Market in the US (2000 & 2001): Percentage Breakdown of Sales Album Labels - Universal, Indies, WEA, Sony, BMG, and EMD (includes corresponding Graph/Chart) III-23

Table 46: Music Market in the US (2000-2001): Portable CD Players Vs MP3 Players (In Million Units) III-24

Table 47: Major Music Web Casters in the US (includes corresponding Graph/Chart) III-24

Technological Developments III-24

Futuristic Recording Facilities III-24

Fiber Channel - The Digital Backbone III-25

Product Launches/Developments III-25

Strategic Corporate Developments III-27

Key Industry Association III-62

The Recording Industry Association of America III-62

Key Players III-63

Sony BMG Music Entertainment III-63

Universal Music Group III-63

Warner Music Group III-63

B.Market Analytics III-64

Table 48: US Recent Past, Current & Future Analysis for Music Recording with Annual Sales Figures in US$ Million for Years 2000 through 2010 (includes corresponding Graph/Chart) III-64

Table 49: US Long-term Projections for Music Recording with Annual Sales Figures in US$ Million for Years 2011 through 2015 (includes corresponding Graph/Chart) III-65

Table 50: US Historic Review for Music Recording with Annual Sales Figures in US$ Million for Years 1991 through 2000 (includes corresponding Graph/Chart) III-65

2. Canada III-66

A. Market Analysis III-66

Current & Future Analysis III-66

Music Market Overview III-66

Table 51: Leading Players in the Canadian Music Market (2004): Percentage Breakdown of Sales for Universal Music, Sony BMG, Warner Music Canada, BMG Music Canada, and Others (includes corresponding Graph/Chart) III-66

Table 52: Music Recording Market in Canada(2005-2007): Shipments in '000 Units by Format -CD, DVD, & Others (includes corresponding Graph/Chart) III-67

Table 53: Music Recording Market in Canada (2005-2007): Shipments in C$ '000 by Format - CD, DVD, and Others (includes corresponding Graph/Chart) III-67

Table 54: Leading Music Retailers in Canada (2000): Percentage Breakdown by Sales for HMV, General, Music World, A&B Sound, Archambault Musique, Sam the Record Man, Future Shop, General Retailers (Wal-Mart, Zellers), and Others (includes corresponding Graph/Chart) III-67

Illegal File Swapping - A Major Concern for the Industry III-67

Digital Sales III-68

CRIA Applauds Supreme Court's Decision on Private Copying III-68

Canada Steps into Digital Age III-68

HMV Demands Lower Prices from Record Labels III-68

Usage Activity of Internet for Music / Online Music: Everybody Wants a Share III-68

Market Trends/Issues III-69

Major Music Labels to Re-launch CD Singles III-69

CD-R Piracy on the Increase III-69

Regulatory Environment III-69

Music Industry Wins Internet Transmission Case III-69

Key Industry Associations III-70

The Canadian Recording Industry Association III-70

Canadian Independent Record Production Association III-70

Product Launch III-70

Strategic Corporate Developments III-71

B. Market Analytics III-72

Table 55: Canadian Recent Past, Current & Future Analysis for Music Recording with Annual Sales Figures in US$ Million for Years 2000 through 2010 (includes corresponding Graph/Chart) III-72

Table 56: Canadian Long-term Projections for Music Recording with Annual Sales Figures in US$ Million for Years 2011 through 2015 (includes corresponding Graph/Chart) III-72

3. Japan III-73

A. Market Analysis III-73

Current & Future Analysis III-73

Music Market Overview III-73

Competitive Scenario III-73

Leading Players III-73

Major Legal Online Music Services III-74

Legal Online Music Services in Japan III-74

Japanese Music Download Market (2004): Major Services and Service Providers III-74

Table 57: Leading Labels in the Japanese Music Market (2004 & 2005): Percentage Breakdown by Sales for Sony BMG, Toshiba-EMI, Avex, Universal,Victor, Warner, Toy's Factory, Pony Canyon,Zetima, & Others (includes corresponding Graph/Chart) III-75

Table 58: Music Software Market in Japan (2000): Percentage Breakdown of Sales by Company - Sony Music Entertainment Japan, Avex, Toshiba EMI, Universal Music KK, Victor Entertainment, and Others (includes corresponding Graph/Chart) III-75

Mobile Music Market III-76

DVD Recorder Market III-76

Table 59: Leading Players in the Japanese DVD Recorder Market (2004/05): Percentage Breakdown of Volume Sales for Matsushita, Sony, Toshiba, Sharp, and Others (includes corresponding Graph/Chart) III-76

Issues Facing the Japanese Recording Industry III-76

Music Distribution in Japan III-77

Key Statistics III-77

Sales III-77

Table 60: Music Recording Market in Japan (2006): Percentage Breakdown of Value Sales by Type - Domestic and International III-77

Table 61: Music Recording Market in Japan (2005 & 2006): Percentage Breakdown of Value Sales by Type - Audio, Music Videos, and Digital Music Delivery (includes corresponding Graph/Chart) III-78

Table 62: Music Recording Market in Japan (2006): Percentage Breakdown of Value Sales of Recorded Music by Type - Audio and Music Videos III-78

Table 63: Music Recording Market in Japan (2005 & 2006): Sales through Digital Music Delivery in '000 Units by Type - Mobile Digital Contents, Internet Downloads, and Others (includes corresponding Graph/Chart) III-78

Table 64: Music Recording Market in Japan (2005 & 2006): Digital Music Delivery Sales in '000 Units by Select Mobile Digital Content - Mastertones, Single Track, and Ringback Tones (includes corresponding Graph/Chart) III-79

Table 65: Music Recording Market in Japan (2005 & 2006): Digital Music Delivery Sales in '000 Units by Internet Downloads - Single Track, Album, and Others (includes corresponding Graph/Chart) III-79

Table 66: Music Recording Market in Japan (2005 & 2006): Sales through Digital Music Delivery in yens Million by Type - Mobile Digital Content, Internet Downloads, and Others (includes corresponding Graph/Chart) III-80

Table 67: Music Recording Market in Japan (2005 & 2006): Digital Music Delivery Sales in yens Million by Select Mobile Digital Content - Mastertones, Single Track, and Ringback Tones (includes corresponding Graph/Chart) III-80

Table 68: Music Recording Market in Japan (2005 & 2006): Digital Music Delivery Sales in yens Million by Internet Downloads - Single Track, Album, and Others (includes corresponding Graph/Chart) III-81

Table 69: Music Software Market in Japan (2001-2004): Breakdown in yens Billion by Category - Music CD Sales, Music CD Rentals, Mobile Phone Music Downloads, and Internet Music Downloads (includes corresponding Graph/Chart) III-81

Production III-82

Table 70: Music Recording Market in Japan(2006): Production(i) in Million Units by Type - Recorded Music (Audio & Music Videos), and Digital Music Delivery (includes corresponding Graph/Chart) III-82

Table 71: Music Recording Market in Japan (2002-2006): Production(i) of Recorded Music in Million Units by Type - Audio and Music Videos (includes corresponding Graph/Chart) III-82

Table 72: Music Recording Market in Japan(2001-2006): Production of Audio Recordings(i)in Million Units by Type - Domestic and International (includes corresponding Graph/Chart) III-83

Table 73: Music Recording Market in Japan (2002-2006): Production of Music Videos in Million Units by Format - DVDs; and Tapes, LDs & Others (includes corresponding Graph/Chart) III-83

Table 74: Music Recording Market in Japan (2001-2006): Audio CD Production in Million Units by Type - Domestic and International (includes corresponding Graph/Chart) III-84

Table 75: Music Recording Market in Japan (2001-2006): Audio CD Singles Production in Million Units by Type - Domestic and International (includes corresponding Graph/Chart) III-84

Table 76: Music Recording Market in Japan (2001-2006): Production of 5" CD Albums in Million Units by Type - Domestic and International (includes corresponding Graph/Chart) III-85

Table 77: Music Recording Market in Japan (2006): Production(i) of Audio CD in '000 Units by Type - Audio (Singles) and 5" CD Albums III-85

Table 78: Music Recording Market in Japan (2006): Production(i) of Audio (Singles) in '000 Units by Type - 3" CDs and 5" CDs III-85

Table 79: Music Recording Market in Japan (2001-2006): Production of 5" CDs in '000 Units by Type - Singles and Albums (includes corresponding Graph/Chart) III-86

Table 80: Music Recording Market in Japan (2001-2006): Production in '000 Units by Disc Type - 7" & 10"/12" Discs, 3" CDs, and 5" CDs (includes corresponding Graph/Chart) III-86

Table 81: Music Recording Market in Japan (2006): Production(i) of Audio Recorded Music in '000 Units by Type - Audios (Singles), 5" CD Albums, Vinyl Discs, Cassettes, and Others (includes corresponding Graph/Chart) III-87

Table 82: Music Recording Market in Japan(2006): Production(i) in yens Billion by Type -Recorded Music (Audio & Music Videos),and Digital Music Delivery (includes corresponding Graph/Chart) III-87

Table 83: Music Recording Market in Japan (2002-2006): Production(i) of Recorded Music in yens Billion by Type - Audio and Music Videos (includes corresponding Graph/Chart) III-87

Table 84: Music Recording Market in Japan (2001-2006): Production of Audio Recordings(i) in yens Billion by Type - Domestic and International (includes corresponding Graph/Chart) III-88

Table 85: Music Recording Market in Japan (2002-2006): Production(i) of Music Videos in yens Billion by Type - DVDs; and Tapes, LDs & Others (includes corresponding Graph/Chart)

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