Paid Music Downloading, MP3 Player Sales Double

Persistence is paying off in the battle between the record industry and music sharers, as Ipsos-Insight determined that there has been a growing willingness among Americans to pay for their tunes.

The firm’s research revealed that the number of paying music downloaders doubled in the first half of 2003 — coinciding with the Recording Industry Association of America’s (RIAA) announcement that they intended to begin prosecuting file-sharers and the release of Apple’s iTunes music store.

Ipsos-Insight estimates that roughly 10 million Americans — or 16 percent — paid to download music or MP3 files off the Internet, while only 8 percent paid during the fourth quarter of 2002 and 13 percent paid in the first quarter of 2003.

“A twofold increase in the number of American downloaders exposed to for-pay music downloads in just a six month timeframe signals a remarkable shift in downloader behavior,” said Matt Kleinschmit, director, Ipsos-Insight.

Among the age groups, those 18 to 24 are the most likely to have paid to download digital music, while 12 to 17 year olds were among the least likely. “Downloaders of all ages are clearly beginning to experiment with fee-based online music distribution in increasing numbers,” said Kleinschmit.

Demand for Music Subscriptions and Downloads
Type of Consumer
(number sampled)
Subscriptions Downloads Will Not Pay
for Music
Music aficionados (357) 21% 25% 46%
Free-music fans (514) 13% 19% 60%
CD purists (280) 10% 16% 71%
Passive populace (746) 7% 10% 79%
Source: Jupiter Research

Possibly reaping the benefits of digital music downloading are manufacturers of MP3 players. Ipsos-Insight found that 19 percent of U.S. downloaders own a portable digital audio player/portable MP3 player — up from just 12 percent in December of 2002.

“The rise in portable MP3 player ownership among U.S. downloaders, coupled with the growth in paid downloading, suggests that digital music enthusiasts may be shifting their overall music acquisition and listening behaviors from a physical to a digital approach,” added Kleinschmit. “This should be positive sign for associated industries, in that legitimate market opportunities are increasingly prevalent in the world of digital music, even alongside unauthorized peer-to-peer filesharing.”

Jupiter Research (a unit of this site’s corporate parent) expects U.S. shipments of MP3 players to practically double in 2003 to over 3.5 million, and will continue to grow almost 50 percent per year for the next several years.

In a 2003 Jupiter Research consumer survey, 6 percent of online adults said they would be buying a portable music device in the next 12 months, and the likely buyer is male (over 70 percent) and under age 35 (over 65 percent). Nearly 60 percent of customers in the market to buy a player will be shopping online for the holidays, seeking convenience and the ability to mail gifts directly.

The paid online music growth could be spurred by the high price of CDs, and between July and October 2003, 7.7 million digital tracks were recorded as sold, compared to 4 million physical units of CD singles.

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