Sales of physical goods shrink, as digital products claim market share
Digital product sales are projected to grow over the next five years, as consumers turn away from traditional forms, according to new research by IBIS World.
Technological change and evolving consumer preferences has caused a continuous decline in purchases of physical products, such as CDs, DVDs, Blu-ray, magazines, newspapers and printed books. While consumers are showing signs of nostalgia, as Vinyl records sales have increased, overall it only contributes to a small portion of the music industry’s revenue.
IBIS World said the reproduction of recorded media is expected to continue to decline, to the benefit of operators in the digital segment. The speed and convenience of obtaining songs and films through online subscription services, like Apple’s iTunes or Spotify, has also aided the growth of digital media sales. Printed books and magazines are also expected to face strong competition from their digital counterparts.
The reproduction of recorded music into physical goods, is forecast to shrink by an annualised 6.2%, while hardcopy books and magazines are expected to decline by an annualised 3.8% in the five years through 2013-14.
Whereas, digital media sales are projected to grow robustly over the next five years, spurred by developments in cloud computing technology that enable access to online content from a variety of devices. If you're an avid online shopper, make sure you're using a credit card with low fees and a low interest rate. Search the credit card market here.
“A high Australian dollar for the majority of the past five years has made online purchases from overseas more attractive for consumers, driving the popularity of digital books, while local retailers had to contend with the costs of shipping and importation,” IBIS World said.
The news comes as high interest online accounts soar in popularity despite falling rates, by an estimated 1.5 million people (44%) in the last 5 years according to Roy Morgan research.