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Online Music Market Growth Projections

Healthy growth in the online music market will continue for the rest of the decade, with worldwide sales growing from $1.5 million in 2005 to $10.7 million in 2010, reports In-Stat. Additionally, In-Stat expects that revenue from downloaded music will outpace revenue from physical media bought online by 2007.

This is evidence that the Internet is now a key distribution channel for legitimate digital music sales; and the mobile phone is also evolving into an important channel for digital music.

"Consumers are clearly opting for legal ways to purchase music, and more legitimate music sites are available," says Stephanie Guza, In-Stat analyst. "But vendors still face significant obstacles including Internet piracy, interoperability concerns, and the unlicensed use of digital streams."

In-Stat's consumer survey found the following:

- Nearly half of the survey respondents admitted to downloading music from the Internet; and 64 percent of these respondents have paid for online music.
- The largest percentage of respondents who have purchased music online spent between $10 and $20 in the last 12 months.
- The most popular site used was iTunes, with 53 percent of music purchasers having used the site.

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