JupiterResearch Forecasts That Digital Music Spending in the U.S. Will Reach $2.5 billion in 2011

Business Wire, Jan 8, 2007

NEW YORK -- 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."

The complete findings of this report and recommendations for marketers and advertisers are immediately available to JupiterResearch clients online at www.jupiterresearch.com. For details on JupiterResearch's methodology, visit www.jupiterresearch.com/bin/item.pl/methodology or email press@jupiterkagan.com to request a detailed methodology statement. For additional information on this report, JupiterResearch's Music research service, visit www.jupiterresearch.com or contact Kieran Kelly, Senior Vice President of Global Sales and Client Service, at 1-800-481-1212 or researchsales@jupiterkagan.com.

About JupiterResearch

JupiterResearch provides unbiased research, analysis and advice, backed by proprietary data, to help companies profit from the impact of the Internet and emerging consumer technologies on their business. The company helps online businesses make critical decisions about technology selection, spending, staffing, and Web site effectiveness; advises consumer-facing companies with online advertising, marketing, and customer service strategies to understand, attract, convert and retain customers; and guides technology vendors and service providers on market opportunity, positioning, product definition, and pricing. JupiterResearch is headquartered in New York City and has offices throughout the US and Europe. For more information, visit www.jupiterresearch.com. JupiterResearch is a division of JupiterKagan, Inc.