New report warns of 'The End of Music As We Know It'

Yesterday, Billboard reported that Forrester Research is predicting that digital music sales will surpass CD sales in five years time. Additionally, the music news publication revealed that the report is "ominously titled 'The End of Music As We Know It.'" The big prediction by the research group is that "digital sales will grow by 23% a year through 2012," reaching $4.8 billion in annual sales during that year. At the same time, the report indicates that CD sales will fall to $3.8 billion by 2012 and the digital growth will not replace the declining CD sales in that time.

The report is based on a survey of just 5,000 consumers in the United States and Canada, finding MP3 devices "underutilized, with just 57% capacity filled." In an interesting development, the group also expects tracks without digital rights management technology to expand to all digital outlets, in addition to social networks, "where friends could sell friends their favorite songs." The latter part is the truly remarkable change since that would indicate that the future of the music industry lies in the hands of consumers, rather than with the currrent music industry companies. Aside from digital sales growth in the next five years, Forrester also sees online music subscription services growing as well, reaching $459 million in revenues by 2012.