JupiterResearch Forecasts That Digital Music Spending In The U.S. Will Reach $2.5 Billion In 2011
JupiterResearch, a leading authority on the impact of the Internet and emerging consumer technologies on business, forecasts that digital music spending in the US will reach $2.5 billion in 2011.
Detailed in a new report, "US Music Forecast, 2006 - 2001," digital download spending will grow at a 16 percent rate compounded annually over the next five years, while the smaller subscription service business will grow at a 32 percent rate.
"Strong hints of digital substitution - consumers buying digitally instead of buying CDs - are finally appearing among early digital music users," said David Card, vice president and senior analyst at JupiterResearch. "Last year we witnessed downloads growing over 30 percent, to over $800 million, and subscription services grew 14 percent, to over $185 million."
JupiterResearch also finds that digital sales will not compensate for lost CD sales over the next five years, nor will they return the overall industry to growth. Combined, digital music sales will total 22 percent of US consumer music spending by 2011.
"As detailed in our research, the music download business will remain a sampling medium for many users rather than a CD replacement," said David Schatsky, president of JupiterKagan. "For the next several years, on-demand subscription services will appeal primarily to niche audiences among music aficionados."
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