Music Fans Rip More, Spend More
As the music industry continues to blame the Internet for lagging global sales, Jupiter finds that experienced file sharers are more likely to have increased their music spending budgets.
As the music industry continues to blame the Internet for lagging global sales, Jupiter finds that experienced file sharers are more likely to have increased their music spending budgets.
Fierce opponents of music downloading may not appreciate the findings of research conducted by Jupiter Media Metrix indicating that experienced file sharers are 41 percent more likely than the average online music fan to have increased their music spending levels.
The music industry has been outspoken about its disdain for Internet file swapping, with former Recording Academy president and CEO Michael Greene calling the sharing process, “the most insidious virus in our midst.” Greene also says that the Recording Industry Association of America (RIAA) estimates that an astounding 3.6 billion songs are illegally downloaded every month.
Jay Berman, chairman and CEO of the International Federation of the Phonographic Industry (IFPI) cites the Internet as the cause for a 5 percent drop in global music sales. “In 2001 the international recording industry was caught in a perfect storm, buffeted by the combined effects of mass copying and piracy, competition from other products and economic downturn. The industry’s problems reflect no fall in the popularity of recorded music: rather, they reflect the fact that the commercial value of music is being widely devalued by mass copying and piracy,” said Berman.
Jupiter theorizes that the real reasons for the decrease in global music spending are multi-faceted. Normal music market cycles combined with an overall drop in consumer spending, coupled with increased competition from other entertainment product categories, and increased reliance by the music industry on a small number of titles for the majority of sales may be factors. Also, the end of the CD growth period, which was spurred by consumers upgrading titles they already owned in other formats, is a contributor to the 5 percent decline.
Jupiter’s research was conducted in June 2001, coinciding with the examination of the industry by the IFPI, and is based on a survey of online music fans (defined as users over the age of 18 who had visited a music site in the prior year). Findings include:
Jupiter found that respondents who reported increases in spending often exhibited online behaviors that reflected their interest in music – visiting artist or label sites; buying CDs, tickets and merchandise online; listening to free or paid streaming content; reading music news online; sharing reviews and opinions with other users; ripping and burning their own CDs; using instant messenger programs; using in-store kiosks; downloading music player software; and downloading free tracks.
Furthermore, those with increased spending habits tended to be higher-volume music purchasers than the decreasers were. However, the reduction in spending reported by decreasers was greater, on average, than the boost in spending reported by increasers. This fact may help explain the lower overall market spending levels.
The music industry’s worst fears may be realized through the findings of a Parks Associates study of 711 consumers in U.S. households with Internet access that reveals more than 40 percent have downloaded MP3 files onto their home computers, and they are storing an average of 305 music files on these “virtual jukeboxes.”
“Prior to this study, we assumed that a fair number of home Internet users of all ages were taking advantage of music-swapping services and CD-ripping software,” said Kurt Scherf, vice president of research for Parks Associates. “What we didn’t realize was the staggering amount of music files stored on home computers. The home computer – at least in certain segments – is quickly evolving into an important hub for entertainment content inside the home.”
Percent of US Home Internet Users Who Have Downloaded and Stored MP3 Files, by Age |
65+ | 13% |
---|---|
55-64 | 24% |
45-54 | 40% |
35-44 | 50% |
25-34 | 62% |
18-24 | 81% |
Source: Parks Associates |
Average Number of MP3 Files On Home Computers, by Age |
65+ | 72 |
---|---|
55-64 | 124 |
45-54 | 177 |
35-44 | 340 |
25-34 | 721 |
18-24 | 348 |
Source: Parks Associates |