Although the CD will be unshaken as the main music format, the emergent digital music market will account for 16% of the overall pan-European recorded music pie in 2011, a new report predicts.

Although the CD will be unshaken as the main music format, the emergent digital music market will account for 16% of the overall pan-European recorded music pie in 2011, a new report predicts.

Jupiter Research, a division of Jupitermedia Corporation, says greater broadband penetration and a deeper available catalog will help stimulate the pan-European digital music business to a value of €1.6 billion ($1.9 billion) in 2011.

European consumers in 2005 spent €192 million ($228 million) on digital music across 17 countries, up 267% from €52.3 million ($62 million) in the previous year, Jupiter Research claims in its new publication.

"Following years of underperformance," says Jupiter Research, "Europe's digital music market has finally begun to overcome supply and demand hurdles such as weak consumer demand, low broadband penetration and poor catalog availability."

Driven by stronger than average purchasing trends, a stronger subscription sector and higher prices than its neighboring territories, Jupiter says Britons accounted for the lions' share of European download sales last year, with 29% of the pie.

Jupiter's forecast is slightly conservative compared to some figures circulating in industry circles recently. EMI Group chairman Eric Nicoli told Midem delegates in January that EMI is "on track" to generate 25% of its revenue from the digital space by 2010. IFPI chairman and CEO John Kennedy also considers that 25% by 2010 is a "realistic" figure.

In its recently-published 2006 "Digital Music Report," the IFPI pegged the global digital music business at $1.1 billion in 2005, up three time in value from the previous year. Without breaking out a value for the pan-European market, the IFPI confirmed it has "begun to take shape, with the United Kingdom, Germany and France leading the way."

While Jupiter senior analyst Mark Mulligan admits that paying for digital music is "currently a niche activity" and is far outweighed by illegitimate peer-to-peer file-sharing, he forecasts 2006 to be a "key year for European digital music subscriptions."

Jupiter Research will disclose further findings from its report March 15 at the Plug.IN Music Forum in London. Pascal Cagni, Apple's VP and GM Europe, Middle East and Africa, will keynote the conference at the Royal Society for the Encouragement of Arts, Manufactures and Commerce.

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