I find pleasure in downloading music to my computer and portable digital music player. In fact, I cannot recall the final time I has been at a music store. I’m a convert. I like listening to music samples on the Internet and purchasing only the tunes that I want and not wanting to buy an entire disc where I can like only several song tracks. This is the reason why iPods from Apple computer Inc. (AAPL) have grown exponentially in popularity to the current cult status. A friend of mine received a 30GB iPod for Christmas and trust me you have never seen a person so excited.

A 30GB iPod can hold up to 7,500 compact disc  quality tunes. That is impressive. Apple is a trendsetter in my estimation. From its MAC to the iPod, CEO Steve Jobs has a keen knack for trends. These portable music devices have so much memory because he probably expects a massive shift to compact disc  burning and downloadable music. Apple’s iTunes Music Store is booming.

Just last week, the International Federation of the Phonographic Industry released its research into the digital music business and the determinations weren’t a surprise. Just like how Internet DVD movies have dominated the video rental market, dominated by Netflix Inc. (NFLX), and pushing incumbent Blockbuster Inc. (BBI) to the sidelines, the exponential growth of the Internet music business has been on an explosive upward path.

According to the research, sales of digital music world wide improved by over 300  percent in 2005 to $1.1 billion. The research said digital music accounts for about 6  percent of total music sales, up from  profoundly little two years back.

The competition in the industry is fierce and expected to ramp up going forward. This might guide to consolidation in the industry down the road and result in decrease prices. we might see the bigger and more established players taking out the smaller up and comers.

Besides Apple, there are a slew of Online music websites . Probably the most well known is Napster Inc. (NAPS). Napster reported it has over 500,000 subscribers but has yet to turn a profit and is not expected for the time being. But the company has minimal debt and a whopping $128 million or $2.91 per share in cash. Given that the current share price is 3.08, this implies you’re paying a mere $0.17 for the company’s asset and potential. This is pretty nice and enticing for speculators, but then Napster must deliver profits. Napster may be the dark horse in the digital music business.