Fifty-five percent of European broadband users would pay up to €15 a month to download legal music files to their PCs, according to a seven-country survey by research firm Strategy Analytics. The possible annual revenues could amount to €650m.

Those surveyed as part of "Online Music: Europe's Sounding Good", expressed considerably more interest in downloading music files than in other broadband entertainment services.

In addition, the willingness to pay for music downloads was nearly three times higher than the next service - listening to streamed audio of music channels.

"Music companies should strike while the iron is hot," said David Mercer, principal analyst at Strategy Analytics. "Broadband users are clearly ready and waiting to start downloading music tracks, and to pay for the privilege. Incremental revenue opportunities await those pioneers willing to explore new business models offered by on-line delivery," he said in a statement.

The report also found that on-line music aggregator On Demand Distribution (OD2), which is currently leading the European market, will come under pressure from a number of new market entrants during 2004.

Bristol-headquartered OD2, which was founded by musician Peter Gabriel, currently has 260,000 music tracks available for streaming and downloading through its Sonic Selector platform. The company has digital music deals with MTV Europe, French ISP Wanadoo, UK dance music brand Ministry of Sound and music retailer HMV.

© ENN