As the YouTube/PRS spat rumbles on, Forrester Research director and music specialist Mark Mulligan‘s report on Monetising Social Music fires this admonishment at the squabbling children: “Both sides are partially right, but they must compromise - or risk crippling the sector. And they will need to make allowances for the impact of the economic downturn on the online ad market.” He warns royal collectors they can’t get the same rates they’re used to: “Lower music revenue per user is inherent in the rise of free-to-consumer consumption-based models.”

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Forrester in January said social music sites will see European audiences double to 78 million and pay out €392 million by 2014 for using music. It’s new report shows how 12 percent of UK internet users today use social music websites. And Transatlantic usage differs - whilst most US social music site visitors are aged 25 to 34, in Europe, the audience skews younger, mostly under 24.

But won’t the rise of free-to-consumer social music sites mean less income for labels? Consider this - although social music site users are nearly three times as likely to share their files, they’re also more likely to buy music. While just six percent of European internet users generally buys digital downloads, that rises to 17 percent of social music site users. “Streaming versus buying is not a binary equation,” Mulligan says. Full report here.