US consumer online music spending will grow from US$1.0 billion in 2001 to US$6.2 billion in 2006, a 43 percent annual growth rate over the next five years, according to data released by Internet research firm Jupiter Media Metrix.
Jupiter, which kicks off its annual Plug.In convention in New York today, said 30 percent of online music sales in 2006 will come from digital downloads and music subscriptions, while the rest will be sales of traditional physical products ordered through the Web.
That's a big leap from 2001, when digital music sales - via single paid downloads and digital subscription models - will comprise only three percent of total online music sales, according to Jupiter.
Jupiter said music subscription services will dominate online music sales in 2006, while downloads will make up the majority of these sales in 2001.
For instance, single paid downloads will total US$25 million in 2001 versus US$3 million for subscriptions. However, in 2006, downloads will yield an estimated US$700 million versus US$1.2 billion for subscriptions.
The research firm said online music sales will represent seven percent of total US music sales in 2001 and 32 percent in 2006.
The world's biggest record labels -- including Vivendi Universal's Universal Music, Sony Music, Warner Music, EMI Group and Bertelsmann AG's BMG -- are all planning to roll out music subscription services later this year to fill the void left by Napster, the once wildly popular song-swap service.
The recording industry has managed to cripple Napster with a landmark copyright lawsuit against the service, although free swapping of music continues to thrive on alternative Web outlets that are potentially harder to restrain, according to a report issued last week by Jupiter.
On Friday, Jupiter said the total time spent using Napster plummeted 65 percent among home users in 14 leading wired countries from 6.3 billion minutes in February 2001, Napster's peak month in terms of both time and unique users, to 2.2 billion minutes in June 2001.
The data are consistent with other research. Webnoize, another Internet research firm, reported in June that usage on Napster had shrunk to an average 1.5 songs shared per user, down from an average of 220 in February.
