June 21, 2007

By By Brian Garrity, N.Y.

PriceWaterhouseCoopers forecasts that overall recorded music revenues in the U.S. will decline at a 0.4% compound annual rate over the next five years, amid the ongoing transition from physical to digital distribution.

The consulting firm estimates that overall U.S. music revenues will fall from $11.5 billion in 2006 to $11.3 billion in 2011.

Big gains are expected in digital revenues, which are forecasted to rise from $1.8 billion in 2006 to $6.5 billion in 2011 -- a 28.7% compound annual growth rate. By 2011 the PC-based business will total an estimated $4.5 billion vs. $2 billion for mobile music.

Over the same span, physical distribution numbers, namely CDs, are expected to sink from $9.6 billion in 2006 to $4.7 billion in 2011 -- a 13% decline on a compound annual growth rate.

PWC anticipates digital distribution will overtake physical sales by 2010 when download and mobile revenues total an estimated $5.7 billion vs. $5.2 billion for CDs.

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