09/05/2003 -- Cd Sales Will Continue To Decline

Recent Survey Indicates CD Sales Will Continue to Decline

September 5, 2003 -- September 5, 2003 - Forrester Research released a study predicting a huge drop in compact disc sales as Internet music file-sharing keeps gaining ground on the flagging CD. Forrester's survey of 4,782 adults and 1,170 young people showed that about 20 percent of all Americans download music from the Internet. Half of the downloaders say they're buying fewer CDs, but more than two out of three young downloaders told Forrester they'd stop if they risked jail or a fine. The study forecasts that in five years, about a third of music sales will come from downloads, and CD sales will drop 30 percent from their 1999 peak.
"On demand services are the future of entertainment deliver," said Josh Bernoff, principal analyst at Forrester. "CDs, DVDs, and any other forms of physical media will become obsolete." At least 10 Windows-based music services are expected to emerge in the next nine months, the report said, and by the end of 2004, downloads and on-demand subscriptions may bring in $270 million. If the trend continues, three years from now digital music sales could account for $1.4 billion of the music industry's $12.8 billion in expected revenues. "Consumers have spoken -- they are tired of paying the high cost of CDs and DVDs and prefer more flexible forms of on-demand media delivery," Bernoff said. "Piracy and its cure -- streaming and paid downloads -- will drive people to connect to entertainment, not own it," the report concluded.