Digital sales of music accounted for 10 percent of the total global music market in 2007, up from 6 percent in 2006, according to In-Stat.

By 2012, digital music sales will represent 40 percent of all music purchased worldwide. Contributing to the growth include the global expansion of broadband, demand for single-track downloads and expanding music catalogs.

Another factor is the potential of growth in full-track downloads to mobile handsets outside of Japan, the main market for this kind of digital music format.

“Digital piracy continues to represent the primary challenge to online music service providers,” says Stephanie Ethier, In-Stat analyst. “Other obstacles still include the lack of interoperability between services and devices due to differing digital rights management (DRM) technologies, and weak consumer demand for subscription-based services.”

“Another potential market inhibitor is the fact that content owners, cellular service providers and handset manufacturers are increasing the amount of marketing and promotion for mobile music.”

Sales for online digital music reached $3.05 billion in 2007, up 48 percent from 2006. Revenue for global full track downloads will hit approximately $4.2 billion by 2012.