A new study by JupiterResearch, a Forrester Research company, predicts that digital music will grow from the current 18% to 41% of total sales in 5 years. Researchers credited stores like Amazon and the transition to mp3's which make downloads portable for some of the increase.
The "U.S. Music Forecast 2008 to 2013" predicts that growth in digital music sales will not compensate for declining CD sales, with the U.S. music market shrinking over the next five years from $10.2 billion to $9.8 billion.
64% of subscribers to digital music services and 57% of those who download music also bought a CD in a store within the last year. Regular digital music consumers have shifted 60% of their music spending to digital. The study predicts that music on cell phones will only contribute 3% to overall sales or $300 million by 2013.
ANALYSIS: While the CD will continue to hang on, most..
major labels are already approaching 30% of revenue from digital. Last week Atlantic claimed that 50% of its revenue already come from digital. While some have disputed that projection, it seems that JupiterResearch has erred too far in the other direction. If digital does not account for 50% or even 60% of total sales by 2013, it will only be because the industry has continued to build roadblocks to its own success.