US data indicates music buyers are making more use of digital music services.
Research firm The NPD Group reveals that the number of US CD buyers who have also bought music digitally has "more than tripled" so far in 2004, with just under 5 per cent of CD buyers now saying they have used such services. Just 1.7 per cent of CD buyers also used these services in 2003.
Consumers who downloaded from a legal service or became paid members of subscription services showed only a slight reduction in the number of CDs that they purchased at retail. The average consumer who paid for digital music as well as CDs purchased less than one fewer CD in 2003 compared to 2002.
The labels will be pleased with a second finding, that: "The likelihood that a CD and download purchaser also downloaded a song through an unauthorized service in 2004 has also fallen, from 64 per cent in 2003 to 42 per cent in 2004."
"Paid services such as iTunes and Rhapsody appear to be attracting core music buyers, which can create a firm foundation for legal digital music purchases," said Russ Crupnick, president of NPD Music. "NPD data shows that there has been a small reduction in sales of CDs; however, that decline might be offset by the overall value of the digital customer and the downturn in illegal file sharing."
CD buyers who also used an online music subscription service such as Rhapsody in the past twelve months purchased an average of 11 CDs last year; those who had paid for a music download from legal download site such as iTunes purchased 10 CDs; those who used a P2P file-sharing site purchased eight CDs; and those who did not download or stream music from the Web bought six CDs.
"Our research shows that it’s the people who are really into music that are beginning to adopt paid digital services as an additional way of acquiring and enjoying music, and so far these services are living side by side with traditional CDs", Crupnick said. "As the industry matures and digital music becomes even more mainstream, it remains to be seen just how much paid digital music will affect the market for CDs."
However, the industry is going to have to determine a child-friendly way to protect itself against copyright abuse on the part of under 18-year olds. Research from Harris Interactive on behalf of the Business Software Alliance reveals that 88 per cent of kids between 8-18 already understand copyright, but continue to use file-sharing to download media all the same.
53 per cent of 1,100 US children aged between 8-18 surveyed admitted to downloading music, 32 per cent download games, 22 per cent software and 17 per cent download movies.
Diane Smiroldo, vice president of public affairs for the Business Software Alliance. "The fact that kids know stealing software is wrong, and yet they behave like it's okay, clearly illustrates a challenging ethical dilemma."