INTERNET  Online music market in 2005

Internet music sales are expected to top $5.2 billion in 2005, fueled by sales from record labels and the ease of ordering CDs and downloading tunes over the Internet, according to a study issued Tuesday.

Online music sales hit $170 million last year, according to the study from research outfit Music Business Intl. Overall U.S. retail spending online, according to Jupiter Communications, will almost double this Christmas to $5 billion from $2.6 billion a year ago.

The Music Business Intl. study said Internet sales will represent one-tenth of the total $46 billion music market in 2005, with downloaded music pegged to be worth $635 million alone. Digital downloaded music will represent 16% of total music sales in the U.S. in 2005 and 8% in Japan. The U.K. will lead the way in Europe, followed by Germany and France. The music market is currently worth about $39 billion annually.

Artists such as David Bowie and George Michael and rap group Public Enemy have already endorsed the use of MP3 technologies to provide downloadable music to consumers.

An estimated 3 million CD-quality tracks are already downloaded each day, most of them for free; in response, music companies have teamed up to figure out how best to protect their copyrights and royalties.

According to the report, more than 350 million people will be online by 2003, with many expected to be downloading music files.

What's still uncertain is which format will ultimately become the dominant means of listening to music online.