Industry sluggishness and lackluster digital services mean weaker online music sales than first believed, though such sales are still seen as hitting $3.3 billion by 2008, according to cyberspace and digital analysts Jupiter Research in a study released Monday.
"The industry is suffering from competition for entertainment dollars, changing demographics, the end of the CD upgrade cycle, and piracy," said Jupiter analyst Lee Black in a formal statement.
Jupiter's analysis indicated that such services as Apple's still-new and popular iTunes Music Store and Buy.com founder Scott Blum's launch last week of BuyMusic have stirred interest enough in digital downloading. But Black said that refreshed interest won't mean much more than $80 million in online music sales this year.
"Jupiter has repeatedly lowered its online music forecast over the past few years, each time citing an under-performing market and the failure of digital music services to meet consumer expectations," said CNET.com. "Last year, the research firm projected that the online music market would grow to $5.1 billion in 2007, a downward revision from the $5.5 billion it expected in 2006.
