The industry is already projected to dip under the R2-billion mark on spending on physical CD sales, and digital and even live music, according to accounting firm PricewaterhouseCoopers .

Its entertainment and media outlook report, released yesterday, forecasts a double-digit decline in CD sales between this year and 2014, from R1.1-billion to R898-million, and to R746-million by 2016.

In the same period, spending on digital music is expected to increase from R140-million to R198-million, reaching R261-million by 2016.

CD sales command a 60% share of the local music market but that is expected to drop by 23% by 2016. The decline is expected to be offset by a 16% increase in spending on live music and a 7% increase in spending on digital music by 2016.

But Tony da Silva, the chief operating officer and finance director of the EMI record label, said despite these numbers, positive factors were emerging. He said that though the industry had declined by 3.9% between January and July this year, it had been expected that the weakening would be by around 5%.

He added that though international music had seen a 9% decline in sales, sales of local repertoire had increased by 1.6%. Local music now accounted for over 50% of all market revenue.

"We're certainly not panicking. From some of the discussions we've had, it is something we expect because it has happened five to seven years earlier in some of our established markets. We believe there is still a very strong market.

"It's become quite essential for labels to think carefully in terms of where they allocate their money. A few years ago, you could take a couple of chances," Da Silva said.

This was PricewaterhouseCoopers' third edition of the South African entertainment and media outlook, which also reported that:

Pay television households are expected to increase from 4.25million this year to around 5.9million within the next four years - a 9.8% compound annual increase.

"The availability of popular sports on pay TV has proved to be a major lure. Enhanced services for the high-end subscriber, and discount packages for the less affluent, have helped to expand the market."

The Twilight Saga: Breaking Dawn Part 1 was the highest-grossing film locally last year, making R28.2-million, The Smurfs made R27.8-million, Transformers3 grossed R21.7-million, and The Hangover Part 2 rounded off the top 10 films by making R19.2-million

The total cinema market, including cinema advertising, is projected to grow to R1.7-billion by 2016, R1.3-billion from box-office sales

Kwaito star Professor's Lento was the most downloaded song for 2011, followed by Zahara's Loliwe, DJ Cleo's Facebook, Lulo Cafe and Nothende's I Wanna Love You, and Zahara and DJ Sbu's Lengoma.