Online seen claiming 41 pct share of U.S. music market

LOS ANGELES Mon Dec 1, 2008 8:04pm EST

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LOS ANGELES (Reuters) - Digital music sales account for 18 percent of the U.S. music market and that figure will grow to 41 percent in five years, Forrester Research said in a report released on Monday.

The report titled "U.S. Music Forecast, 2008 to 2013" also forecast that 55 percent of U.S. online consumers will pay to download digital music in 2013.

JupiterResearch, a division of Massachusetts-based independent company Forrester Research, said in the report that growth in digital music sales will not compensate for declining CD sales, with the overall U.S. music market shrinking over the next five years from its current level of $10.2 billion to $9.8 billion.

The report also noted crossover between CD and digital music purchases. In a survey, researchers found that 64 percent of subscribers to digital music services and 57 percent of consumers who download music have bought a CD in a store in the past year.

The Forrester Research report comes as digital music sales have emerged as the main growth sector for the U.S. music industry.

While online piracy has long accounted for the bulk of digital music downloads, the Forrester Research report noted that paying for music downloads is increasingly popular.

The researchers also credited companies such as Amazon.com Inc with helping propel digital music sales by allowing consumers to buy digital music that can be transferred between different devices without restrictions.

The report also found that digital music consumers are shifting an average of 60 percent of their music spending to digital formats.

The researchers looked into the fledgling sector of listening to music on cell phones but found that even if that catches on in the United States, it will have a limited affect on overall music sales, amounting to less than $300 million in 2013.

(Reporting by Alex Dobuzinskis: Editing by Jill Serjeant)

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