There’s been a fair bit of speculation today about rumors of Napster scaling back its operations. Whatever may or may not be the case with Napster, the European digital music space is inevitably going to face a big shake up some time in the not too distant future. There are simply too many services and too few digital music consumers. The odds are that for a number of reasons (e.g. continued funding and investment, loss leading to drive ulterior revenues streams etc), 2006 will remain a year of growth. But after that expect some market contraction. These issues (and others) are covered in a lot of detail in the forthcoming report ‘European Digital Music Value Chain: Making the Most of Small Margins and High Costs’ which will be published soon. Again watch this space for more details.