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2005 Online Music Download Forecast

In 2004, digital music generated $339 million in revenue. Of this, � la carte downloads (individual tracks and albums) accounted for $183 million and music subscription services accounted for $156 million. Apple�s iTunes accounted for approximately 70 percent of � la carte download revenue. Yankee Group estimates that in 2005 revenue from � la carte downloads and music subscription services will grow to $256 million and $192 million, respectively.

According to the Recording Industry Association of America (RIAA), consumers downloaded 139.6 million tracks and 4.5 million albums from legitimate music services in 2004. In 2005, Yankee Group estimates that consumers will download 199 million tracks and 5.9 million albums. However, downloads from licensed music stores continue to pale in comparison to the number of tracks downloaded from peer-to-peer (P2P) networks. With the number of P2P users continuing to grow despite efforts by the music industry to curtail music piracy, consumers downloaded an estimated 4.8 billion tracks in 2004 and the 2005 total will likely reach 5.7 billion.

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