Forrester Research on Tuesday predicted a steep fall in CD sales, as audio and video file sharing over the Internet continues to emerge as a preferred option among consumers.
The firm said 20 percent of Americans engage in music downloading, and half of the downloaders said they are buying fewer CDs. By 2008, 33 percent of music sales will come from downloads, with CD sales down 30 percent from their 1999 peak. On-demand movie distribution will generate $1.4 billion by 2005, and revenue from DVDs and tapes will decline 8 percent, Forrester predicted.
“The shift from physical media will halt the music industry’s slide and create new revenues for movie companies, but it will wreak havoc with retailers like Tower Records and Blockbuster,” Josh Bernoff, principal analyst at Forrester, said in a statement. “As a result, we’re about to see a massive power shift in the entertainment industry.”
