updated 09:05 am EST, Thu December 15, 2005
Napster edges iTunes
A new study from global marketing research firm Insight reveals that the battle for mass market consumer awareness remains essentially a two-horse race between Apple's iTunes and Napster 2.0. The survey found that while that more downloaders recognize the Napster brand, Apple's iTunes was more consistently rated the "The Best" download service. Both services also boast the highest usage levels among all online music services, while iTunes was lauded more often for its integration with the iPod and new comers MTV and MySpace were associated with being "hip" or "cool." Despite the dominance by both companies, Ipsos said that its TEMPO Digital Music Brandscape study also provides encouraging news for other digital music providers, finding that American downloaders are showing significant increases in awareness of a wide variety of digital music services, and only nuanced brand differentiation among them.
iTunes and Napster remain current awareness leaders
The survey, conducted in August of 2005, revealed that US downloaders aged 12 and older are nearly equally as likely to be aware of Napster 2.0 and Apple's iTunes on a "top-of-mind basis" (31% vs. 27%, respectively); however, when prompted with actual brand names, nearly four out of five (79%) downloaders recognize the Napster brand, while roughly three out of five (57%) are aware of iTunes.
"While top-of-mind awareness remained relatively consistent with what was seen in 2004, aided awareness of iTunes significantly increased in 2005 (from 46% to 57%) while aided awareness of Napster 2.0 remained constant."
While the dominance of both iTunes and Napster seemed secure, Ipsos also found several signs of increased awareness for a broader set of online services and music download stores. The company said that several other services enjoyed name recognition among the same audience, including Yahoo! Music (49%), RealPlayer Music Store (45%), Rhapsody (41%) and MTV.com (37%). Yahoo! Music and MySpace.com were new entrants to the list, according to Ipsos.
"Over the course of the past year, and even more recently with high-profile moves from Microsoft and MTV, we've witnessed the introductions of numerous legitimate online music services, as well as the growing influence of Apple's iPod on the broader fee-based digital music market," said Matt Kleinschmit, Vice President of Ipsos Insight and author of the TEMPO study. "These data indicate that while consumers remain most likely to be aware of iTunes and Napster, other fee-based services are benefiting from the mainstream growth in digital music and iPod in particular, and remain viable options for consumers seeking fee-based online music outlets moving forward."
iTunes solidifies 'Best' Positioning
While brand awareness plays a key role in the industry, Ipsos found that strong name recognition itself has not automatically translated into perceptions of leadership within the fee-based digital music community. "While Napster currently holds a premium competitive position in terms of overall consumer awareness, downloaders were more likely to rate iTunes as the "best" fee-based digital music service, followed by Napster (33% vs. 22%, respectively)." The survey found that iTunes' leadership in the industry became more pronounced over the past year, with number of people ranking the service as "the best" increasing from 24 percent in 2004 to 33 percent in 2005.
In addition, brands with notable total name recognition levels such as Rhapsody, Walmart.com and MusicMatch received more moderate "best" ratings within the downloader community (7% for each). According to the results, Rhapsody in particular experienced significant gains in 'best' rating, jumping from 3 percent last year to 7 percent this year.
Similar to the results found Ipsos in leadership perceptions, both iTunes and Napster 2.0 also boast the highest reported usage levels among American fee-based downloaders. iTunes again edges Napster 2.0 for the No. 1 position, as roughly two out of five (43%) of fee-based downloaders report using iTunes, while one-quarter (26%) report Napster 2.0 usage. Following these services are Walmart.com (16%), Music Match (13%) and Rhapsody, which also showed the most noteworthy increase in usage over past year (from 8% last year to 13% this year).
"In 2005, iTunes and Napster continue to hold unique and distinct advantages in terms of awareness and usage, yet there is still an opportunity for competitors to emerge and be successful in the digital music market. In order for competing services to establish and maintain a stable user audience in this increasingly crowded and commoditized market, it will be critical to distinguish themselves from the dominant players, possibly by focusing on service elements and enhancements that are currently not offered on the well-known websites. These efforts will not only help to differentiate new striving brands from iTunes' current brand strength and appeal, but may also attract potentially more loyal segments of digital music users who are interested in more specialized niche features than just core functionality."
'Extras' not so important for customers
In addition to specific digital music service brand affinities, the TEMPO 2005 Digital Music Brandscape also found that those who have downloaded music are most likely to value good sound quality, ease of searching for music, a broad music selection, ease of use and perceptions of a good value as important features of any digital music service.
In contrast, less importance is placed on the service offering extras such as Podcasts, album artwork and promotional songs or the ability to exchange ideas or recommendations with other service users. Ipsos said that many of the most familiar fee-based online music brands, including iTunes and Napster, are strongly associated with these valued traits, while iTunes was most closely positioned as enabling seamless Portable MP3 Player integration and allowing the user to take music with them. Meanwhile, brands such as MTV and Myspace.com are more closely associated with music discovery, sharing between users and being hip or cool.