Last.fm claims its 12-week-old free, full-track music streams have resulted in 119 percent more CD and download sales through its Amazon.com (NSDQ: AMZN) click-through partnership. Some of that is attributable to an expected increase in site users following the new offering - but Last.fm also claims those who were members prior to the launch have been purchasing 66 percent more albums and tracks than beforehand, thanks to the full new previews. Figures for Last.fm’s 7Digital and iTunes affiliates weren’t disclosed and Last.fm wouldn’t supply the baseline figures.

Co-founder Martin Stiksel (via emailed release) offers the stats as evidence free music discovery can lead to dollars: “In just over two months, it’s become clear that people will buy CDs and downloads if they get access to the kind of service we offer.” That may help reassure some music execs that services like his, imeem and iLike can indeed aide sales.

A new JupiterResearch forecast seems to back that up - but is more cautious on timescale. It says ad-supported download stores (like SpiralFrog), subsidized subscription services (like Omnifone’s MusicStation Max and Nokia’s (NYSE: NOK) Comes With Music) and DRM-free files will finally kick in and help generate two billion euros ($3.24 billion) in European digital music by 2012.

Jupiter glumly noted digital sales have so far equalled only a third of the industry’s total lost revenue since 2004, and added illegal P2P sharing is still more than twice as popular as digital music buying. More cheerily, it repeated its earlier forecast that digital will offset physical losses by 2010.

• London Mixer Multimedia Report: Q&A With Martin Stiksel, Last.fm Co-Founder
• Digital Music Sales To Offset Physical Decline By 2010?
• @ Last.fm Announcement: Free On-Demand Music Platform