Report: Digital Music Spending To Reach $2.5 Bil. In 2011
January 10, 2007 at 10:49 AM (PT)
JUPITERRESEARCH, a division of JUPITERKAGAN, forecasts that digital music spending in the U.S. will reach $2.5 billion in 2011. Detailed in a new report, "U.S. Music Forecast, 2006-2011," digital download spending will grow at a 16% rate compounded annually over the next five years, while the smaller subscription service business will grow at a 32% rate.
"Strong hints of digital substitution -- consumers buying digitally instead of buying CDs -- are finally appearing among early digital music users," said JUPITERRESEARCH VP/Sr. Analyst DAVID CARD. "Last year we witnessed downloads growing over 30% to over $800 million, and subscription services grew 14% 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% of U.S. 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 JUPITERKAGAN Pres. DAVID SCHATSKY. "For the next several years, on-demand subscription services will appeal primarily to niche audiences among music aficionados."