Digital Sales Predicted To Pass CDs By 2012

A new study from Forrester Research Inc. predicts that half of all music sold in the U.S. will be digital sales by the year 2011, with digital music surpassing the CD in 2012. The Massachusetts-based research firm says that digital music sales will increased with a compound annual growth of 23 percent over the next five years, bringing in $4.8 billion by 2012. However, CD sales figures will continue to decline to $3.8 billion by 2012.

"This is the end of the music industry as we know it," stated James McQuivey, VP and principal analyst at Forrester Research. "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."

Forrester adds that although major music chains such as Tower and Sam Goody have shuttered stores, when retailers like Best Buy and Wal-Mart give music less floor space, it will truly signal the end for CDs. The company also predicts that "experiments in ad-supported downloads will be silenced by the powerful combination of DRM-free music and on-demand music streaming on sites like imeem.com.: