Legal MP3 downloads are predicted to increase – relative to current downloads – at a rate of some 23% per year over the next five years. The numbers of music downloads conducted unofficially or illegally are unreported but the true figures are likely to surpass the official numbers by many times.

What does this mean for the ‘traditional’ side of the industry? Like any business those relying on CD sales will simply have to move quickly. This is a fact of business, and it is those that remain agile that survive the longest.

A study by Forrester Research Inc. has shown that by 2011, half of all music bought in the US will be music downloads; by 2012, music downloads will surpass CD sales. With the popularity of filesharing through programs like Limewire and Ares continuing to soar, as well as legal music downloads increasing at impressive rates, CDs sales will suffer. For example, more users download ares now for filesharing than use the most popular pay per download service like Rhapsody.

The most impressive thing about these numbers is, that they don’t even count unauthorized free mp3 downloads These are undoubtedly exciting times.