In the annual NPD survey of Internet users, it has found that paid music downloads have made a significant increase from 7% to 10% of all music acquired between 2006 and 2007. However, the amount of music acquired on physical CDs has made a sharp fall from 41% to just 32%.
So what makes up the remaining 58% of music acquired in 2007? Unfortunately for the music industry, it actually consists of unpaid for music, resulting in a 6% increase over 2006. For anyone that's curious to know how the unpaid for music is split out between P2P, copied CDs and copied music files, this is actually split roughly equal between each in 2007. Compared to 2006, the percentage burning CD copies has dropped by 2%, while the percentage of those copying music files from others has risen by 2%.
Despite the crackdown of file sharing by the music industry, the amount of music obtained by P2P has gone up by 5%. On the other hand, if the NPD survey is pretty accurate, it surely blows away the music industry's and anti-piracy organisation's claims that for every song paid for, there are 5, 10, 40, etc. are downloaded illegally. In fact, going by the NPD 2007 survey, if we leave out music file copying and copied music CDs, for every song downloaded by P2P, another two are paid for. Ok, that's still not ideal, but certainly the total opposite to all the other reports we've seen from the music industry and anti-piracy organisations.
Despite the major growth in MP3 players such as the iPod, the NPD group has some rather interesting results when it came to determining how people listen to their music. By far the most popular way is the trusty AM/FM radio, which is not really surprising considering that pretty much the entire population has one, it is easy to operate and it does not cost anything apart from the electricity or batteries required to power it. The next most popular way is by CDs in a CD player, which again is not really a surprise considering that many still have no idea how to download music or rip CDs, never mind know how transfer songs on to a digital music player. The next most popular regularly used methods include music files on a PC and on a portable music player. The least popular method for listening to music is on a mobile phone.
Now that Amazon has finally a music download store that sells DRM-free music from the four major labels, NPD has found that Amazon has already made a very good start. It may still be a long away behind iTunes, but so far it has managed to grab 1/10th the market share of Apple in the US, bringing it to the second most popular way of buying music as downloads. However, while Amazon has the advantage of not having DRM, it will still have a tough time taking over iTunes, since even though iTunes has DRM on most of its music, many iTunes customers don't actually care since as their iPods work with iTunes anyway, why switch?
Further information including graphs can be viewed in this New York Times Bits report.
