A new study by JupiterResearch, a Forrester Research company, predicts that digital music will grow from the current 18% to 41% of total sales in 5 years. Researchers credited stores like Amazon and the transition to mp3′s which make downloads portable for some of the increase.

The "U.S. Music Forecast 2008 to 2013" predicts that growth in digital music sales will not compensate for declining CD sales, with the U.S. music market shrinking over the next five years from $10.2 billion to $9.8 billion.

64% of subscribers to digital music services and 57% of those who download music also bought a CD in a store within the last year. Regular digital music consumers have shifted 60% of their music spending to digital. The study predicts that music on cell phones will only contribute 3% to overall sales or $300 million by 2013.

ANALYSIS: While the CD will continue to hang on, most..

Though the online availability of Ghosts may haunt music labels, no one will be chilled by Reznor’s lyrics. The Ghosts four-volume collection contains instrumentals only.

Trent Reznor
(Photo Credit: Wikipedia)

On the Ghosts’ website, Trent Reznor said, “I’ve been considering and wanting to make this kind of record for years, but by its very nature it wouldn’t have made sense until this point. This collection of music is the result of working from a very visual perspective – dressing imagined locations and scenarios with sound and texture; a soundtrack for daydreams.”

“I’m very pleased with the result and the ability to present it directly to you without interference,” he continued.

An instrumental-only work from Nine Inch Nails would have given label executives fits. Mainstream radio simply does not play instrumental works; confusion would reign for the American Idol-addled audiences Clear Channel and Cumulus reach.

However, savvy businessman that he is, Reznor gave fans plenty of of options to enjoy Ghosts. The first nine songs may be obtained for free, along with a 40-page PDF document and a pack of “digital extra” that include wallpapers and icons.

All 36 songs may be purchased in one download for $5. Fans spending $10 on the 2 CD set will receive a download key for Ghosts ahead of the April 8 shipping date.

Where Reznor shows the real potential of the digital marketplace comes with options tailored to the hardcore fans who have been around since Pretty Hate Machine and are willing to spend on more content. $75 combines the 2 CD pack with a DVD and a Blu-ray disc, to be shipped in May.

$300 picks up the $75 goodies, plus “an exclusive four-LP 180 gram vinyl set in a fabric slipcase, and two exclusive limited edition Giclee prints in a luxurious package,” signed by Reznor and limited to 2,500 pieces.

Musicians with an established fan base, or the desire to build the kind of devotion that makes a $300 content offer a viable option, need to look at what Reznor believes he can do without a coterie of major label executives leeching off of his work.

Top label executives should look even closer and think about how they might construct such an approach for their acts, before those musicians decide the Net delivers better chances to connect with and profit from their fanbases.