Internet research firm Jupiter Media has changed its formerly optimistic estimates for online sales in the US and recommended that record companies should not rely on a growing online market to make up for financial losses accrued by dwindling CD sales. Although the company predicted that legal internet downloads would generate revenues of $5.1bn by 2007, they have changed that estimate to $3.3bn by 2008. This despite the recent success of Apple's iTunes and the crackdown on illegal downloaders.
Jupiter Research analyst Lee Black said: "The industry is suffering from competition for entertainment dollars, changing demographics, the end of the CD upgrade cycle and piracy."
The research also says that despite the tough approach of the Recording Industry Association of America towards illegal downloading, less than 17% of US adults have cut back on online piracy.