MUMBAI: While sales of CDs and vinyl still dominate the industry accounting for 61 per cent of all music sold worldwide, digital sales is set to take over the music market by 2015.

According to market research company Strategy Analytics, digital music spending will represent 39 per cent of global music spending this year, with streaming digital content (alone) rising by 40 per cent throughout the year to become the dominant growth engine for the digital format.

Download, which represents the bulk of digital spending at US$ 3.9 billion to streaming’s US$1.1 billion, is growing at 8.5 per cent worldwide.

Overall digital spending is expected to be up 17.8 per cent for 2012 –touching US$8.6 billion – compared with a 12.1 percent decline in physical sales.

According to the Global Recorded Music Forecast, digital music spending in the US is (already) almost double what it is, percentage-wise, in the rest of the world – 41 to 22 per cent  is well ahead of the curve when it comes to the physical –to- digital tipping point. Other countries like South Korea and Sweden are also experiencing the transition at a faster rate.

“Having stabilized long term revenue declines resulting from the downsizing of packaged music spending, the industry will be hoping that digital can rebuild the US music market to something approaching its former stature,” states Strategy Analytics director of digital media, Ed Barton.

A large part of that rebuilding effort will rely on the continued success of the streaming music format; as with the global view, streaming is growing faster in the US than downloading, with growth rates hitting 27.8 per cent against down loading’s 6.7 per cent. Streaming music services like Spotify and We7 are set to generate UK ?696m for the global music industry in 2012.  Developed in Sweden, Spotify alone generated 252.7 million krona (UK? 24m) in the first six months of the year.
However, some musicians have complained about royalty rates on streaming services - which pay artists a fee every time their song is played.

Cellist Zoe Keating claims she was paid just US$ 281.87 (UK ?179.70) by Spotify after her songs were played 72,800 times by users.

Pop artist Shannon Hurley earned only US $14.87 (?9.48) from 4,030 plays.

Those statistics suggest that each stream of a song earns around 0.002 pence.

However, record producer Martin Mills, who founded Adele's record label ‘XL’ has defended digital services like streaming, saying some of his artists now earn ‘more than half’ of their revenue from streaming services.

"If we didn't have digital we wouldn't have a business," he said.