Digital music study suggests low prices fight piracy

A statement from Russ Crupnick, president of NPD's Music and Movies division supports Apple CEO Steve Jobs' idea that legal digital music sales with low pricing are a key factor in fighting the war on piracy, contrary to the opposing view of major record labels. Crupnick said: "we're seeing a slow shift from illegal P2P downloading to use of legal digital music services. In the early days of digital music, the majority of digital files came from illegal P2P file sharing services. Now we're seeing a rising incidence of legal digital music downloads and a significant slowing in the number of P2P users, as legal services continue to gain traction." Crupnick concluded that "there are several basic prescriptions for continuing healthy growth in legal digital services, they include reaching out to broader demographic segments; continuing to pressure illegal P2P services, while educating consumers to the benefit of legal alternatives; and providing a compelling price-versus-value proposition to the consumer."

CD sales declined five-percent in the second quarter, but digital music sales are offsetting the difference, growing 175-percent during the first half of this year with more than 155 million tracks downloaded from legal digital music services, such as Apple's iTunes Music Store. NPD research suggests nearly seven in 10 households have experienced digital music in one form or another, and 69-percent of internet-using households have at least one digital music file on their home PC. NPD also suggests the average computer music user has 340 music files in his or her digital music library, up 24-percent when compared to the same period last year.

Filed under: industry
Other story tags: digital music/video