CDs and DVDs are doomed - so say those soothsayers at Forrester, who reckon that the "end of physical media is nearing".
Forrester reckons that a third of all music sales will be made by downloads in the next five years. It also predicts that almost 15 per cent of films will be viewed by "on-demand" services such as cable TV rather than by DVD or video by 2005.
Although this will "wreak havoc" with traditional retailers flogging and renting the stuff, digital downloads and on-demand services could give the creative industry a much-needed shot in the arm, concluded the report From Discs to Downloads.
"On-demand services are the future of entertainment delivery. CDs, DVDs, and any other forms of physical media will become obsolete," predicted Forrester analyst Josh Bernoff.
"Music and studio executives are finally beginning to understand that they must create new media services through channels that consumers will pay for. Consumers have spoken - they are tired of paying the high cost of CDs and DVDs and prefer more flexible forms of on-demand media delivery," he said.
According to Forrester, music sales are set to increase by more than half a billion dollars in 2004 thanks to online revenues.
Equally, on-demand movie distribution channels will generate $1.4 billion by 2005, while revenue from DVDs and tapes will decline 8 percent.
In both cases it seems that the rise in revenues is due to punters becoming more comfortable with online alternatives leading to subscription services taking-off.
Forrester's survey of 6,000 people found that one in five Americans downloads music, with half admitting that they buy fewer CDs. ®