Of all the products sold online, media-related products have been the most popular: books, music and software.
    And the revolution in buying such items online has barely begun. 
    According to a new report from Forrester Research, the web will transform the retail landscape yet again when these products begin to be bought and sold digitally—direct to the consumer via the web onto his or her PC. No more packages required.
    Forrester predicts that 22 percent of all online media products sold on the web will be downloaded by 2004.
    This is no pie-in-the-sky prediction. The report says that a majority of retailers are already anticipating the day that digital downloading is part of their revenue stream.
      "All retailers expect downloads to be business as usual in the future," states the report.
    The fact that DSL or cable modems are expected to be in 38 percent of online households by 2003 should help push downloading along.
    Software and music will be the media products that will lead the downloading revolution. Forrester projects that fully 40 percent of all software purchased online will be downloaded by 2004, and 25 percent of all music purchased online (See chart).
    While there are yet to be any video games available through downloading, Forrester expects this category to blossom quickly over the next few years, led by the mid-2000 release of Sony’s PlayStation 2, which will feature connectivity to the internet. 
   Sony plans to offer downloadable games through its broadband network by 2001. By 2004, the research firm says, 14 percent of all online video game sales will be through downloaded products.
    The idea of the "electronic book"--a device the size of a book that receives downloadable text--is not expected to catch on too fast, if at all, in the realm of recreational reading. But because of the potential market for such things for textbooks and other readily outdated material, Forrester also anticipates that by 2004 downloads will account for 14 percent of all online book sales.
    Because of bandwidth and storage issues, movies are not expected to be commonly downloaded by 2004.    
    Forrester notes that downloads do not make money so far for those web-based retailers that offer them--most are used in a "try this for free" mode. The report does not stop to wonder if it will be hard to break consumers of this habit.
    In any case, the market is substantial. Forrester notes that online households are now spending $800 annually for media products bought on the web.
    The reality of digital downloading will not merely affect online shoppers. Forrester anticipates a serious change in how even traditional retailers end up selling media products.
    No longer will sellers receive physical products from book or music distributors to sell to consumers as they are received. 
    In the age of digital downloading, retailers will get the content digitally and then offer it to consumers in any number of new, mix-and-match formats. The day after Madonna wins a Grammy, for instance, a store could offer a "content bundle" featuring a remix of a song, a video interview, and a chapter from her book.
    Or stores might sell subscriptions to textbooks rather than the physical books, to allow people to keep their reference books updated.
   

PROJECTED SALES OF ONLINE MEDIA  1999-2004
Software, music, video games, videos and books
$ in millions
	1999	2000	2001	2002	2003	2004
Online Sales	$3,641	$5,523	$7,544	$10,265	$12,166	$12,964
Download Only	$100	$338	$786	$1,426	$2,095	$2,891
Download as % of Online Sales	3%	6%	10%	14%	17%	22%
Source: Forrester Research