Following years of doom and gloom surrounding the rise of internet piracy and the death of physical formats, we’re finally hearing some good news from the UK music industry. In May the British Phonographic Industry (BPI) announced that UK digital music revenues overtook those from physical formats. It means that the UK music industry is finally catching up with the US and China who were already earning the lion’s share of their revenue from online digital music distribution. The BPI report states that consumers spent a total of £155.8m on music in the first quarter of 2012, with 55.5%, or £86.5m coming from digital music revenues. This trend is set to continue with the growth of music downloads as well as subscription and ad-funded music services. So has the music industry’s winter of discontent finally ended? According to an IFPI report digital music revenues received by record companies grew by 8% in 2011 to $5.2bn, as new global markets were tapped into. In 2011 there were 3.6bn paid music downloads, up 17% on 2010. Music distribution is relatively well-established online, compared to other entertainment industries, and there are two distinct ways that music is marketed and distributed online. The main divide in online music distribution is between access and ownership, and there are important developments on both sides. Music access Access refers to services which offer consumers the ability to listen to music without owning it. This includes streaming services, which are either treated as promotional content or paid for through advertising revenues, and subscription services such as Spotify. Spotify is the biggest player in the music subscription market. Since its launch in 2008 it has gone from strength-to-strength, and last year moved into the USA, the biggest music market of all. It is paid for through paid subscriptions and advertising which is played between tracks. Music Ownership Ownership is the old model of music consumption, pay once and listen forever. Mp3 downloads are growing in popularity, whether it’s mainstream music downloaded on iTunes or independent artists’ music on sites like Band Camp. Many consumers still live in the ownership age, and don’t see the value of music access; they want to own the music. Consumer demand for music is being driven by the growth in popularity of smartphones and tablet devices, as well as growing broadband penetration. Increasingly users are looking to replicate their record collection on iTunes or a mobile device. Technological developments are changing the way that we manage and store music. iTunes launched Match in November 2011, a service which allows users to access their iTunes library across a range of devices without having to manually transfer files. The service costs $25 per year and is licensed by record labels. Google Music was also launched in November for the Android platform, which also helps users to access purchased materials from a cloud to multiple devices. Ownership vs. access Access might be the future of online music distribution, but for now ownership is here to stay. Only a small percentage of the customer base is active in digital music currently, and many of these are the people who still value the ownership of music as a physical product. As the younger generations (who currently use free music access services such as Spotify, YouTube and Pandora) begin to acquire spending power, they are likely to heavily influence the development of paid access-based and subscription services. Until then, the older generations will continue to value ownership of music despite advancements in music access.