RealTime IT News

Pay for Music? Many Say 'No Way'

Listen up, Metallica: More than 66 percent of 5,200 online music shoppers surveyed have not paid for (and would not expect to pay for) digital music downloads, according to a new research report.

The report from research firm Greenfield Online, entitled e-Merging Music II, found that in total, 45 percent of respondents have downloaded music from the Internet. The MP3.com Web site, for example, was visited by 20 percent of the online music shoppers in the study, up slightly from the first e-Merging Music study in August 1999.

The study also found that MP3 music files now have nearly the same penetration level (22 percent) as music videos (23 percent).

Price is a driving force for nearly 80 percent of online music shoppers. If consumers can find an item for a lower price elsewhere, either online or off-line, that's where the transaction will occur, the study found. More than half of respondents (55 percent) shopped for music online and then purchased off-line, while 53 percent had shopped for and purchased music online in the past 90 days.

Because online music shoppers are price sensitive, they generally are not willing to spend more money to get additional features, the report says. For example, a third of respondents think features such as sharing music with friends and/or music portability are important, but they are not willing to pay for this feature. However, more than a quarter of these online music shoppers would pay a premium for the ability to create custom mixes.

Along with a low price, good customer service is a significant factor when respondents make an online music purchase decision. Nearly 70 percent of respondents may not or will not make a purchase if customer service is not satisfactory. Customer service is most significant for online consumers aged 55 and older.

And despite news reports of CDNow.com's struggle with profitability, this site remains the second most visited music retailer on the Web, behind amazon.com. Barnesandnoble.com was third.

This study is part of Greenfield Online's ongoing Digital Consumer series that examines Internet user attitudes and usage.