Consumer spending on digital music will reach $2.5 billion in the U.S. by 2011, according to a new forecast from JupiterResearch. The analyst firm expects a 16% compounded annual growth rate over the next five years for a la carte downloads, while the smaller music subscription niche will grow at a rate of 32%. Overall, digital will contribute 22% of U.S. consumer music spending by 2011.
Lead analyst David Card said downloads grew by more than 30% last year, to more than $800 million, while subscription services grew 14% to more than $185 million. However the firm says digital sales are not compensating for declining CD sales, nor are they expected to over the next five years.