In the music industry, the transition to digital platforms is underway, but it may not be soon enough.

According to a report from JupiterResearch, digital music spending in the United States will account for more than one-third of US consumer music purchases by 2012.

Unfortunately, the increase in digital sales will still not compensate for the lost CD sales that are anticipated in that period.

The report, “US Music Forecast: 2007–2012,” projects that, while CD sales will continue to decline in the next five years, digital music spending will grow to only $3.4 billion.

"That means digital music sales will not compensate for lost CD sales in five years," said Jupiter analyst David Card. "Nor will they return the overall industry to growth."

According to the report, music downloads will replace CDs for many—but not most—music buyers, at least in the next five years.

At least in the short term, on-demand subscription services will appeal primarily to niche audiences of music aficionados.