Report: Free File-Sharing Services Still Dominate Digital Music

Authored by Mark Hefflinger on June 23, 2005 - 8:24am.

Port Washington, N.Y. -- Although legal digital music stores like iTunes and Napster are growing in popularity, free peer-to-peer file-sharing services are still the source for the lion's share of digital music downloads, according to a report from market research firm NPD Group. A survey found U.S. consumers downloaded 243 million songs from free peer-to-peer services in March 2005, while 26 million songs were purchased from online stores. Legal stores are gaining ground though, as NPD notes that in 2003, there were 20 U.S. households who used peer-to-peer for every one household paying for downloads; in 2004, that figure dropped to 3-to-1, and in March 2005 the ratio stood at about 2-to-1. Among consumers trying out digital music for the first time, 41% said they began downloading when they adopted broadband; 30% said they got a better computer; 22% said had purchased an MP3 player; interestingly, 34% said they were the recipient of a digital music promotional offer. However, among those who tried paid services, only 55% returned to buy more downloads -- citing prices and confusing usage rights -- while 85% went back to a peer-to-peer service. NPD said the music industry's lawsuit against file-swappers appear to be having an effect on file-sharing: nearly half of users ages 13 to 25 who said they stopped file-swapping cited the lawsuits as their primary concern. "Between April 2003 when the lawsuits were announced and April 2004 there was a 16 percent decline in the number of songs acquired from P2P; however, those levels have been creeping up again recently although the rise is lagging the growth of broadband," said NPD president Russ Crupnick.
http://www.npd.com/dynamic/releases/press_050623.html