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Digital downloads set for a boost

After two years of falling sales, the music and video retail market is set for a boost as tech-savvy buyers embrace digital downloading, according to a report on Thursday by retail analysts.

Verdict Research said that while the legal digital downloading sector remains relatively modest at just 112 million pounds, the forecast is for spending to grow to nearly 500 million by 2011.

"Over the past year, digital downloading has really started to capture the imagination of customers. The increasing availability of high-speed Internet access is encouraging more consumers to experiment, downloading songs to their MP3 players," Alastair Lockhart, senior retail analyst at Verdict Research, said.

While there were few signs illegal downloading would slow significantly, legal downloading will have jumped by 80 percent in 2006 to represent 2.6 percent of total music and video expenditure.

Retailers have had a tough time in recent years. The market fell 5 percent in 2005 and is on track for a further fall of 1.7 percent in 2006.

One of the key causes for the weakness was the downturn in DVD sales. This was partly attributed to a lack of strong releases and to the market reaching maturity after a surge in buying interest since 2002 when DVD hardware filtered through to the mass market.

Piracy remains the biggest issue. Bootlegged copies of CDs and DVDs continue to erode retail sales, but it is illegal digital downloading that is the more serious problem.

Relatively cheap and readily available high speed broadband Internet access has helped fuel this growth. As fast as illegal sites are closed down, new ones take their place.

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