According to the report, surveys of 1,000 consumers did not find
any evidence of decreased CD buying among frequent digital music
consumers.
Josh Bernoff, principal analyst at Forrester Research, said:
“There is no denying that times are tough
for the music business, but not because of downloading… Plenty of
other causes are viable, including the economic recession and
competition from surging video game and DVD sales. But labels will
soon discover that there are several simple ways of satisfying
today's sophisticated digital music consumers."
Forrester predicts that, in the next two years, labels will
struggle to meet consumer demands. However, the report claims that
by 2005, labels will endorse a standard download contract that
supports burning and a greater range of devices, and will make
content available on equal terms to all distributors, while on-line
retailers will become hubs for downloading.
As a result of the growth potential, artists will eventually
embrace the internet and sign downloading rights over to their
labels. The report estimates that by 2007, digital music revenues
will constitute 17% of the music business in the US.
However, the Recording Industry Association of America (RIAA),
which represents all major record labels, attributes the decline in
music sales to illicit downloading and CD burning, and intends to
continue taking legal action against file-sharing and peer-to-peer
services.
Hilary Rosen, chairman and chief executive of RIAA said to the
Financial Times: “In 1999, 19% of people using the internet for
music purposes said they downloaded music for free; last year that
number rose to 31%.”
The RIAA is also considering the controversial option of suing
individual internet users who offer large volumes of peer-to-peer
services. However, the record labels have so far been reluctant to
follow suit.
