Legal downloads rise by 80 percent in Britain

LONDON (Reuters) - Legal digital downloads of music and video in Britain rose by 80.6 percent during the past year to 112 million pounds, researchers said on Friday.

The market is predicted to grow to 163 million pounds in 2007, retail analysts Verdict Research said in a report "UK Music and Video Retailers 2007".

By 2012, downloads are set to reach 600 million pounds and account for 13.5 percent of the total music and video market.

The market is starting from a low base: it currently accounts for only 4.1 percent, but the pace of growth is likely to remain fast, Verdict said.

"The percentage figures may fall some years, but the cash growth through the tills is big," said Mick Gladding, lead analyst at Verdict.

"It is a very exciting market, probably the most important influence in video and market retailing because it provides a very attractive method for customers.

"It is highly convenient to shop from home and is a low-cost way of delivering music to the customer from the retailers' point of view."

The widespread introduction of DRM-free content, that allows users to make multiple copies of download tracks, is set to be a further boost to the market, as is greater price competition with new players such as Nokia and Amazon launching services.

The market is also predicted to benefit from traditional stores such as HMV, Tesco and Woolworths challenging the dominance of iTunes with enhanced services.

This week, English band Radiohead gave digital downloading a publicity boost when they released their latest album online.

The band invited music fans to pay what they want for their seventh studio album "In Rainbows".

Gladding said of the initiative: "It underlines the importance of downloading as the favored way of buying music."