Music Downloads to Overtake CD Sales by 2012

According to a new report by Forrester Research, digital music downloads will eclipse CD sales within the next five years. The report, which was conducted in the US and Canada, surveyed over 5,000 people. It found that the average MP3 player is only 57 percent full and households that have more than one digital music player are purchasing more. James L. McQuivey, Vice President and Principal Analyst, said "This is the end of the music industry as we know it. Media executives eager to stay afloat in this receding tide must clear the path of discovery and purchase, but only hardware and software providers can ultimately make listening to music as easy as turning on the radio."

The report indicates that over the next five years the annual growth rate of digital music sales will be 23 percent, with a $4.8 billion revenue in year five (2012). We have seen the trend of music labels shifting towards DRM-free music and this is confirmed in the report along with the impact of social networks that host MP3 music.