Jupiter Media Metrix reports that U.S. consumer online music spending will grow from $1.0 billion in 2001 to $6.2 billion in 2006, a 43 percent annual growth rate over the next five years.
According to the July 2001 Jupiter Internet Music Model, online music sales will represent seven percent of total U.S. music sales in 2001 and 32 percent in 2006.
Digital music sales – via single paid downloads and digital subscription models – will comprise three percent of total online music sales in 2001 and 30 percent in 2006, with spending growing from $29 million to $1.9 billion over the same period. While single paid downloads will comprise the majority of digital music sales in 2001 ($25 million for downloads versus $3 million for subscriptions), digital music subscriptions will dominate in 2006 (approximately $700 million for downloads versus $1.2 billion for subscriptions).
“The online music market has a long way to go, despite the achievements of the past year,” said Aram Sinnreich, senior analyst, Jupiter Media Metrix, from the Plug.In forum in New York City. “Legal precedents have been set and label-backed digital music services are preparing to launch, but this is only the beginning of the changes the music industry must undertake. The next hurdle will be in providing digital services at acceptable price points with the features that consumers want most, such as the ability to make copies of downloaded songs, listen to them on any device, and burn CDs.”