Number of Legal Downloaders Doubled in 2004

The Online Reporter is a terrific Tech/Media/Entertainment journal that does a grat job covering the intersection of these areas. If you are int he business of following these firms, do yourself a favor and subscribe tot hem (that’s an unsolicited endorsement).

Here’s their latest take on legal digital downloading:

Ipsos-Insight has released the findings from its most
recent TEMPO quarterly study of digital music behaviors – and the results should
please the record industry. The study found that as of December, some 47% of US
music downloaders age 12 and older – 24 million people – had paid to download
music files off the Internet. That’s more than double the 22% who had done so a
year earlier and five times the number who had paid to download music in
December 2002.

According to the TEMPO research, folks in the 25-54
age range are the most likely to have paid to download digital music, with 50%
of 25-to-34-year-olds and 53% of 35-to-54-year-olds having done so.
Additionally, the younger crowd, those aged 12 to 17, are starting to pay for
the tunes they download as well. Some 50% of that group says they’ve paid for
digital music, which Ipsos-Insight says suggests that recent efforts to promote
pre-payment methods to teens are proving successful.

"Over the past year, the online music market has
proved that it is growing into a formidable music distribution channel marked by
rapid growth and increasingly dynamic usage levels," said Ipsos-Insight VP and
TEMPO author Matt Kleinschmit. "While fiercely competitive online music services
and download stores undertake high-profile efforts to attract consumers to their
respective sites and business models, it is clear from these data that consumers
are increasingly experimenting with legitimate online methods of music
acquisition."

The battle of the sexes is pretty much a draw these
days, with 49% of male downloaders and 45% of female downloaders paying to
acquire digital music. This is quite a different scene than a year ago, when
only 16% of female downloaders and 24% of male downloaders were paying to do
so.

For the first time, the study found equal shares of
the US population downloading from fee-based and P2P download sites – 11%. This,
according to the research, was driven both by the increase in fee-based
downloading and by gradual declines in file sharing among the US population over
the past two years, down from 13% in December 2003 and 19% in December
2002.

"This marks a potential turning point in the
evolution of digital music, as the proportion of Americans using file-sharing
services and fee-based services has intersected for the first time," said
Kleinschmit. "This is significant both functionally and symbolically, as
operators of fee-based digital music Web sites are finally seeing American
downloaders embrace their services, and the broader industry can now see
empirical evidence that fee-based online content can survive and even flourish
while non-licensed content remains available. This was thought to be impossible
only a few years ago – before convenient, flexible and content-laden
consumer-focused online music services, a growing population of portable device
owners, and continuing enforcement efforts nurtured this nascent marketplace.

Of course, downloading doubling  reflects little more than the success of Apple’s design and marketing strategy, and has precious little to do with the music industry. But hell, they’ll take it.

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Source:
THE online REPORTER
February 19-25, 2005 – Issue 432
Published weekly by Rider Research