European revenues from online creative content will leap fourfold over the next four years to €8.3 billion ($10.7 billion), according to a European Commission study.

The report found that online content will represent a significant share of total revenue for some sectors, claiming about 20% of the music market and 33% of that for video games.

The 400-page study, "Interactive Content and Convergence: Implications for the Information Society," credits the surge to the spread of broadband, the roll-out of advanced mobile networks, and the massive adoption of digital devices.

"The long-awaited digital convergence is becoming an economic reality, creating great opportunities for Europe's consumers, content providers and technology industries," EU Information Society and Media Commissioner Viviane Reding said.

"To capitalize may require casting a fresh eye at the technical and legal issues where a modernized and internal market-oriented approach would add value to European content."

Some areas, however, will grow even faster, the report said: the movie sector could see its online revenues swell from €18.7 million ($24.2 million) in 2006 to €1.032 billion ($1.33 billion) in 2010, although still only 7% of the total.

The addressable consumer base for digital music in Europe is still growing rapidly, it said. The market is principally constrained by the availability of broadband Internet -- there were 60 million users in Europe in 2005, but this is forecast to grow to 116 million in 2010 -- and the uptake of personal digital audio devices.

Online music revenues will rise from €285 million ($369 million) in 2006 to €1.1 billion ($1.4 billion) in 2010. This coincides with the decline in the European physical music market, which saw sales fall from 1.13 billion units in 2000 to 962 million in 2004.

Although the online content market was growing steadily, according to the report, issues such as intellectual properties rights and interoperability still had to be addressed.

It identified 36 obstacles to the growth of the online content market, including the slow uptake of 3G in Europe, confusing data tariffs, piracy and the cost of digitizing content.

The study said the most obvious roadblock was connectivity. It also said many market players still needed to adapt to the new distribution technologies that cut across national borders and traditionally separated sectors. However, innovative and collaborative solutions to exploit content online are being found.

Another obstacle is piracy, which the report said siphons off potential revenue and deters media companies from putting content online. Efficient Digital Rights Management (DRM) systems to manage and protect digital content could help secure and sustainable roll-out of digital distribution, but the lack of DRM interoperability or standardization is likely to hinder content services and devices in the long term, it said.