Forrester Research on Tuesday predicted a steep fall in CD sales, as audio and video file sharing over the Internet continues to emerge as a preferred option among consumers.
The firm said 20 percent of Americans engage in music downloading, and half of the downloaders said they are buying fewer CDs. By 2008, 33 percent of music sales will come from downloads, with CD sales down 30 percent from their 1999 peak. On-demand movie distribution will generate $1.4 billion by 2005, and revenue from DVDs and tapes will decline 8 percent, Forrester predicted.
"The shift from physical media will halt the music industry's slide and create new revenues for movie companies, but it will wreak havoc with retailers like Tower Records and Blockbuster," Josh Bernoff, principal analyst at Forrester, said in a statement. "As a result, we're about to see a massive power shift in the entertainment industry."
The music industry's plan to sue individuals for online piracy through software such as Kazaa might pay off. In the Forrester survey, more than two out of three young file sharers said they would stop if there were a serious risk of jail or a fine.
In the next nine months, at least 10 Windows-based music services will emerge, creating alternatives to illegal file sharing. America Online already has 90,000 MusicNet subscribers. Musicmatch and RealOne Rhapsody will try to differentiate their media players with Web radio; BuyMusic will try to take advantage of its early entry with personalized recommendations from ChoiceStream. And Apple Computer will release a Windows version of its popular iTunes service.
http://news.com.com/2100-1027_3-5070177.html?tag=fd_top
The firm said 20 percent of Americans engage in music downloading, and half of the downloaders said they are buying fewer CDs. By 2008, 33 percent of music sales will come from downloads, with CD sales down 30 percent from their 1999 peak. On-demand movie distribution will generate $1.4 billion by 2005, and revenue from DVDs and tapes will decline 8 percent, Forrester predicted.
"The shift from physical media will halt the music industry's slide and create new revenues for movie companies, but it will wreak havoc with retailers like Tower Records and Blockbuster," Josh Bernoff, principal analyst at Forrester, said in a statement. "As a result, we're about to see a massive power shift in the entertainment industry."
The music industry's plan to sue individuals for online piracy through software such as Kazaa might pay off. In the Forrester survey, more than two out of three young file sharers said they would stop if there were a serious risk of jail or a fine.
In the next nine months, at least 10 Windows-based music services will emerge, creating alternatives to illegal file sharing. America Online already has 90,000 MusicNet subscribers. Musicmatch and RealOne Rhapsody will try to differentiate their media players with Web radio; BuyMusic will try to take advantage of its early entry with personalized recommendations from ChoiceStream. And Apple Computer will release a Windows version of its popular iTunes service.
http://news.com.com/2100-1027_3-5070177.html?tag=fd_top